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Spot Bitcoin ETF Race: Global X is Out, Schwab May Be In

Nearly a month after 11 spot Bitcoin ETFs made their market debuts, ETF issuer Global X scrapped its plans to join the fray.

Global X, an ETF issuer with more than $40 billion in assets, quietly withdrew its plans to launch a spot Bitcoin ETF, where it would have joined the 11 others that launched in January.  

An SEC filing on Jan. 30 by Cboe BZX Exchange Inc., which would have listed the fund, announced the withdrawal.  

The announcement comes just after the firm announced it would shutter 19 other ETFs.  

Since the SEC approved spot Bitcoin ETFs, the 11 entrants have seen net flows of about $1.1 billion, according to ETF analyst firm CFRA. Blackrock’s iShares Bitcoin Trust (IBIT) has led the way with $2.76 billion in net flows, followed by Fidelity’s Fidelity Wise Origin Bitcoin Fund (FBTC) at $2.2 billion. The price of Bitcoin itself has dropped slightly since surging to nearly $47,000 in the wake of news that the funds were approved to some $43,000 ever since. 

The ETFs have total net assets of $28.3 billion with Grayscale Bitcoin Trust ETF, (GTBC) which previously operated as a futures-based bitcoin ETF before converting to a spot EFT, boasting $20.7 billion in net assets. GTBC has experienced $5.6 billion in net outflows since the approval of spot bitcoin ETFs with some of the capital shifting to newer entrants charging lower fees than the 1.5% expense ratio on GBTC. Some funds have launched with 0% fees for the first six months in a race to gain assets. 

There may be more shakeups in the market with several analysts speculating that Charles Schwab will enter the market and vie with Fidelity and Blackrock. 

“The spot bitcoin ETF space in the US is still in a nascent stage, so it is difficult to make definitive statements on trends. However, early indications are that firms like Blackrock and Fidelity with established brands and distribution capabilities have an advantage in asset gathering,” said Aniket Ullal, vice president, ETF Data and Analytics for CFRA.” This may encourage large firms like Schwab to enter, but may deter smaller firms. The latter may opt for offering more differentiated strategies in the space.”  


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