ETFs probably won’t track bitcoin precisely, but for BlackRock’s fund, that doesn’t seem to be an issue at all.

Spot bitcoin ETF investors aren’t purchasing actual bitcoin, but for those investing in BlackRock’s fund, that’s been working out just fine thus far.

Since its introduction on Thursday, BlackRock’s iShares Bitcoin Trust (IBIT) has outperformed bitcoin.

It might be more accurate to state that IBIT has outperformed bitcoin, though. Since the ETFs went live, the leading cryptocurrency has down 10.2%, more than a whole percent, due to IBIT’s 8.9% losses.
In actuality, IBIT’s stock price is outperforming that of all its competitors. The worst performing bitcoin ETFs as of 11:50 am ET are Valkyrie’s BRRR and Franklin Templeton’s EZBC, which are down 10.6% and 10.8%, respectively, almost identical to the performance of bitcoin and Grayscale Bitcoin Trust (GBTC).

(In order to exclude any transient volatility that might have distorted the data, the statistics above really began one hour after Thursday’s opening bell. On normal trading days, the first hour is usually best avoided, much less on the first day of the launch of a new ETF class.)
Putting price aside, with $334 million and $1 billion in volume as of right now, IBIT and GBTC are leading the field.

Prior to becoming a spot ETF, GBTC was a closed-ended fund, meaning that shares could not be exchanged for bitcoin.

The amount of money that has moved from GBTC to other funds, if any, is unknown at this time, but the vehicle held about $29 billion in bitcoin before to its conversion earlier this week.

It is reasonable to assume some disparity between the price of bitcoin and the share price of exchange-traded funds (ETFs). This is because ETFs provide exposure to the underlying commodity, whose value is determined by its own supply, demand, and liquidity.

The fact that spot ETFs are expected to closely track the price of the underlying asset compared to funds that have synthetic exposure via futures contracts is a major selling point.

With more than $2 billion in assets as of earlier this week, BITO is the largest bitcoin ETF backed by futures and virtually identical to BlackRock’s fund.

All of this might change in an instant, but overperformance in IBIT or any other cryptocurrency that beat bitcoin may be a sign of investor preferences, with those shares being more in demand than the others.

SEE ALSO: How to purchase Bitcoin via a cryptocurrency exchange

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