JPMorgan provided an analysis of the ownership structure of bitcoin spot ETFs, which reveals that institutional ownership stands at approximately 13% based on recent 13F filings for the first quarter of 2023.
Taking into account additional institutional investors who are not required to apply, such as smaller managers and some investment advisors, the institutional ownership estimate rises to approximately 20%. This leaves retail investor ownership at around 80%, indicating that the majority of new bitcoin spot ETFs have been purchased by retail investors since their inception.
Hedge funds account for the majority of institutional ownership, about 8%. Among new bitcoin spot ETFs, Blackrock's IBIT (NYSE:) has distinguished itself for several reasons.
First, it has garnered the most inflows since its launch, becoming the largest recipient of capital moving away from the Grayscale bitcoin fund, known for its high fees. Second, IBIT is poised to overtake the Grayscale bitcoin Trust as the world's largest bitcoin fund. Third, it has become the most liquid spot bitcoin ETF on the market.
IBIT liquidity assessments use two key metrics. The first is the Hui-Heubel ratio, which measures the breadth of the market or the sensitivity of prices to volumes. A lower Hui-Heubel ratio indicates greater market breadth, and the Blackrock ETF has a significantly lower ratio compared to Grayscale's GBTC, approximately three to four times, suggesting that it exhibits substantially greater market breadth.
The second metric analyzes the average deviation of the ETFs' closing prices from the net asset value (NAV). Low deviation implies high liquidity, and Blackrock's spot bitcoin ETF has shown significantly less ETF price deviation from NAV than Grayscale's GBTC and Fidelity's FBTC in the most recent week, indicating a greater liquidity.
In conclusion, JPMorgan analysis suggests that Blackrock IBIT has already established itself as the most liquid spot bitcoin ETF, eclipsing Grayscale. This could potentially increase its appeal to institutional and retail investors in the future.
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