Spot Bitcoin exchange-traded funds (ETF) are close to their first month anniversary of operating, but there is a chance the field of ETFs may shrink by the end of the year, said Valkyrie Funds’ Chief Investment Officer Steven McClurg.

McClurg predicts that of the ten issuers currently operating, only “about seven or eight” will be left standing. The reason, he tells Decrypt, is because the costs of running a spot ETF for Bitcoin may prove too onerous—especially amid a race to the bottom fee-cut war that can hurt profitability for issuers that are struggling now.

“If you don’t gather $100 million [of assets under management] by now, you might as well cut it loose,” McClurg said.

Since the Securities and Exchange Commission granted its approval to the first batch of Bitcoin spot ETFs on Jan. 10, the influx of funds has been strong. On the first day of trading alone, there was $4.5 billion in trading, a massive start by any standard. In the last day alone there was another $400 million in inflows, according to Bloomberg analyst James Seyffart. 

In looking back at the last month, McClurg said that events in the market largely fell in line with what Valkyrie’s expectations were ahead of the launch.

The exception, McClurg said, was an expectation of higher outflows from Grayscale, whose conversion from a trust to an ETF led to a sell-off in Bitcoin that contributed to a drop in value to below $41,000 before rebounding. However, even if this sell pressure has eased lately, McClurg expects that more outflows may follow and be distributed among other ETFs.

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