The trading activity of Grayscale Bitcoin Trust (GBTC) has soared since BlackRock, the world’s largest asset manager, submitted a Bitcoin ETF filing last week. On June 20, GBTC’s share price skyrocketed by an astonishing 11.40%, closing at $16.85. This surge came amidst GBTC witnessing its highest trading volume of $10.24 million since November 22, 2021. According to data from CryptoQuant, GBTC has rallied over 25%, and its current premium stands at -34.19%, the second-highest point of this year following BlackRock’s ETF filing.
Many top financial institutions are currently applying for a spot-Bitcoin ETF. Grayscale, one of the frontrunners in this race, aims to bring a spot Bitcoin ETF to the market alongside BlackRock’s application. Grayscale’s ongoing battle with the SEC to convert its Bitcoin Trust into a physically-backed ETF may be positively affected by BlackRock’s involvement. Certainly, the gap between the trust’s value and its net asset value has contracted, sparking rumors that BlackRock’s efforts may indeed bolster Grayscale’s case.
While Grayscale is among the world’s largest digital asset managers, heavyweights like BlackRock entering the arena could put its market dominance at risk. Grayscale has been litigating the US SEC to upgrade its trust to a spot Bitcoin ETF. What concerns Grayscale the most might be the substantial fees it imposes on traders.
Data from The Block Research reveals that Grayscale generated over $230 million from its primary GBTC and ETHE products since 2021 began. However, an annual fee of 2.0% and 2.5% is charged for managing these assets, which could decrease if BlackRock successfully launches a competitive product, as per James Seyffart from Bloomberg Intelligence.
Although Grayscale has had recent success, the company’s market position remains uncertain. The entry of larger players such as BlackRock may reduce Grayscale’s clout, but there may also be potential benefits if their involvement aids Grayscale in its legal battles. Ultimately, the impact of stiff competition on the market is still speculative, and the outcome will depend on various factors, such as regulation, product performance, and market sentiment.
It is essential to conduct thorough market research before investing in cryptocurrencies, as the author or publication carries no responsibility for personal financial loss. The content presented in this article may reflect the author’s personal opinion and is subject to market conditions.
Source: Coingape
