Daily inflows into Bitcoin ETFs have turned negative for the first time, and CoinShares is cutting Bitcoin ETP management fees.
A group of newly launched Bitcoin spot funds (ETFs) saw their first cumulative negative turnover since trading opened on January 11, with funds flowing into the funds from BlackRock, Fidelity and others less than the amount investors are withdrawing from Grayscale’s GBTC fund. According to data compiled by Bloomberg ETF market analyst James Seyffart, net outflows from 10 Bitcoin spot ETFs (including GBTC) totaled $158 million on January 25. Data compiled by Coindesk from issuer websites shows that the total number of Bitcoins held across all spot ETFs The ETF (including GBTC) stood at around 649k BTC as of January 24th, up from over 660k BTC the week before, a decrease of about 11k coins. The only fund to actually see negative flows for the week was GBTC, which saw its total number of Bitcoins under management fall from 592,098 to 523,516.
Against this backdrop, leading cryptocurrency-focused asset manager CoinShares announced a significant reduction in management fees for its Bitcoin exchange-traded product (ETP). As a result of this initiative, management fees will plummet from 0.98% per annum to 0.35% per annum, according to the statement. The reduction will take effect next Thursday, February 1st, and will apply to physically backed Bitcoin ETPs in Europe. The statement noted that this action is consistent with CoinShares’ commitment to making digital assets accessible to everyone under the banner of “promoting inclusivity.” Of course, CoinShares sees reduced management fees as a means of increasing investor access to virtual assets through regulated products. Frank Spiteri, head of asset management at CoinShares, highlighted the importance of this decision, saying: “Our goal is to ensure that our products, including CoinShares physical Bitcoin, are not only of superior quality, but also the most accessible to investors across Europe.”
By the way, we recall that after the historical approval of Bitcoin spot ETFs in the United States, CoinShares announced its intention to acquire a division of the Valkyrie Investments fund. CoinShares CEO Jean-Marie Mognetti said the acquisition of the fund’s Valkyrie Investments division is a strategic move to expand the company’s success in Europe to the United States.
Citi economist Veronica Clark and Bleakley Advisory Group CIO Peter Boockvar weighed in on the current state of the economy, market trends and the Fed’s view on interest rates in their recent conversation on CNBC. Clark announced that investors can expect the first round of interest rate cuts from the Fed around June. The speech came just hours before the latest GDP data was released, with economists forecasting 2% growth in the fourth quarter. The growth, which was significantly slower than the roughly 5% rise seen in the previous quarter, has sparked debate about its potential impact on the market and the Fed’s future actions. Peter Boockvar offered a comprehensive analysis of the economic landscape, raising the dilemma between high-end consumers who continue to spend heavily on travel and entertainment, and low- and middle-income consumers who are showing signs of spending becoming a priority. Boockvar pointed to specific examples such as consumers choosing fewer new tires and cheaper options to save money. Boockvar expressed concern about the lag impact of rising interest rates, which he said could limit economic growth this year and next. Veronica Clark agreed that the economic scenario was mixed and highlighted the slowdown in the labor market towards the end of last year. Clarke cited weak hiring rates and rising consumer defaults as indicators of a potential economic downturn. Despite the seemingly excellent 2% quarter, the impact of labor market data and policy decisions on economic activity needs to be examined more closely, Clark said. As the discussion turned to the potential trajectory of interest rates, Clark and Boockvar shared their views. Clark said that based on current trends, investors can expect the first interest rate cut in June and that cuts will continue at subsequent meetings. Boockvar cautioned against cutting interest rates too much and suggested a more measured approach may be needed.
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