Bitcoin ETF

Bitcoin

BlackRock

Spot Bitcoin exchange-traded funds (ETFs) are nearing their first month of operation, with the landscape potentially set for consolidation by the end of 2024, according to Valkyrie Funds’ Chief Investment Officer, Steven McClurg.
In an exclusive <a href="https://decrypt.co/216862/bitcoin-etf-issuers-may-dwindle-by-end-of-year-says-valkyrie-cio" target="_blank" rel="noopener noreferrer nofollow">interview </a>with Decrypt on Feb. 10, McClurg said he anticipates a reduction in the number of issuers from 10 to “about seven or eight.” He attributes this forecast to the financial burdens associated with running a spot Bitcoin ETF, compounded by a competitive fee-lowering trend that threatens the profitability of struggling issuers. McClurg emphasized the critical asset under management threshold of $100 million as a determinant for an ETF’s viability.
Since the U.S. Securities and Exchange Commission <a href="https://crypto.news/sec-approves-spot-bitcoin-etf-on-accelerated-basis/" rel="noopener noreferrer nofollow">approved</a> the first Bitcoin spot ETFs on Jan. 10, the<a href="https://crypto.news/bitcoin-etf-approval-crypto-volume-spiked-market-cap-rose/" rel="noopener noreferrer nofollow"> market response</a> has been robust, with $4.5 billion traded on the first day alone. Recent data shows continued strong inflow, with $400 million reported in a single day, according to Bloomberg analyst James Seyffart.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Cointucky Derby Update. BIG net inflow day of over $400 mln. With almost 8 of the newborn nine took in money yesterday. <a href="https://twitter.com/search?q=%24FBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">$FBTC</a> officially crossed $3 billion in AUM. <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">$GBTC</a> outflow streak continues with -$101.6 mln out <a href="https://t.co/4RX4RsVxki" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/4RX4RsVxki</a>— James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1755953415874625713?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">February 9, 2024</a>
 </blockquote>
 <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 </div>
</figure>
Reflecting on the past month, McClurg noted that market developments have largely aligned with Valkyrie’s projections. An unexpected event was the less severe than anticipated outflows from Grayscale, which, upon converting from a trust to an ETF, experienced a Bitcoin sell-off, leading to a temporary dip below $41,000. Despite this, McClurg foresees potential for future outflows that could benefit other ETFs.
You might also like: <a href="https://crypto.news/blackrock-spot-bitcoin-etf-enters-top-5-us-etps-by-capital-inflow/" rel="noopener noreferrer nofollow"> BlackRock spot Bitcoin ETF enters top 5 US ETPs by capital inflow </a>
Valkyrie, alongside heavyweight competitors like <a href="https://crypto.news/tag/Blackrock/" rel="noopener noreferrer nofollow">BlackRock </a>and <a href="https://crypto.news/tag/fidelity/" rel="noopener noreferrer nofollow">Fidelity</a>, is navigating a crowded market. BlackRock’s iShares Bitcoin ETF and Fidelity Wise Origin Bitcoin Fund have surpassed $3 billion in assets under management within a month — overshadowing Valkyrie’s $123.7 million.
Despite the disparity, McClurg remains optimistic about Valkyrie’s performance, particularly against similar-tier competitors, attributing success to the firm’s digital asset expertise and traditional market experience.
The competition among ETFs has led to aggressive fee reductions aimed at attracting investors. Valkyrie aligned its sponsor fee with industry leaders BlackRock and <a href="https://crypto.news/fidelity-cuts-proposed-spot-bitcoin-etf-fee-to-0-25-amid-industry-fee-competition/" rel="noopener noreferrer nofollow">Fidelity at 0.25%,</a> a move McClurg views as necessary, despite his reservations about the timing of such cuts.
He warns that the financial sustainability of running a spot ETF could be jeopardized for issuers who are already underperforming. As a result, some may eventually exit the market due to unprofitability.
Read more: <a href="https://crypto.news/blackrock-races-to-the-bottom-with-new-bitcoin-etf-fee/" rel="noopener noreferrer nofollow"> BlackRock races to the bottom with new Bitcoin ETF fee </a>

Valkyrie exec predicts fewer Bitcoin ETF issuers by year-end

crypto.news

Other articles published on Feb 10, 2024

Top Crypto Gainers Today Feb 10 – Bonk, Pendle, Immutable, Sponge V2

Artfi Review: Pioneering a Renaissance in Modern Art Investment

Ethereum Price Prediction: Bull Run Shows No Signs of fading

Hong Kong SFC Issues Warning Against Fake MEXC Domains

Exploring Alternative Theories in Bitcoin Market Dynamics

AI Stocks May Face Uncertain Future Despite Stellar Performance in 2024

Join our free newsletter for daily crypto updates!