JPMorgan analysts stated in their latest report that the Bitcoin spot ETF products of BlackRock and Fidelity outperform Grayscale Bitcoin Trust (GBTC), which currently holds the largest asset management scale in the market, in at least two liquidity indicators.
According to the report released on Wednesday by JPMorgan’s analysis team led by Nikolaos Panigirtzoglou, the first indicator is the Hui-Heubel ratio, which JPMorgan uses to represent market breadth. This indicator shows that the ETFs of BlackRock and Fidelity are approximately four times lower than GBTC, indicating that these two ETFs significantly outperform GBTC in terms of market breadth. (Generally, a lower Hui-Heubel ratio indicates better market liquidity, as price fluctuations have less impact on trading volume; conversely, a higher Hui-Heubel ratio indicates poorer market liquidity, as price volatility has a greater impact on trading volume.)
The second indicator is based on the average difference between the ETF closing price and its net asset value (NAV). This indicator shows that the price-NAV difference of the recent week’s Bitcoin spot ETFs of Fidelity and BlackRock is close to that of the SPDR Gold ETF, indicating a significant improvement in liquidity. At the same time, the value calculated by GBTC ETF remains at a higher level, indicating lower liquidity.
Although these two indicators do not cover all dimensions of market liquidity, especially market depth, there is evidence that BlackRock and Fidelity’s Bitcoin ETFs have advantages over GBTC in certain liquidity indicators related to market breadth. The JPMorgan analysts also pointed out that if the expenses of GBTC are not reduced, the fund may see more capital outflows, with funds flowing into other ETFs, particularly BlackRock and Fidelity’s Bitcoin ETFs.
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