BlackRock’s Bitcoin ETF (BTC) Overtakes Grayscale’s GBTC as Leading Spot Bitcoin Investment

• BlackRock’s iShares Bitcoin Trust has taken the lead as the world’s largest fund for Bitcoin, accumulating nearly $20 billion in total assets since its listing in the United States earlier this year.
• According to data compiled by HODL15Capital, the exchange-traded fund held $19.68 billion worth of Bitcoin on Tuesday, surpassing Grayscale Bitcoin Trust’s $19.65 billion.
• Fidelity Investments holds the third-largest spot with an $11.1 billion offering.

BlackRock’s Bitcoin ETF has emerged as the largest spot Bitcoin product, surpassing Grayscale’s GBTC, marking a significant milestone in the crypto investment landscape.

BlackRock’s ETF Continues to See Highest Inflow

Since its launch, the iShares Bitcoin Trust has attracted the highest inflow, totaling $16.5 billion, while investors have withdrawn $17.7 billion from the Grayscale fund during the same period. Possible factors contributing to the outflows from Grayscale include higher fees and exits by arbitragers.

Grayscale’s Strategic Moves

Grayscale held 620,000 BTC at the time of the conversion (1/10/2024), which was more than 3% of circulating supply, but refused to lower the fee (1.5% vs 0.2% for peers), even after investors pulled 330,000+ BTC. Notably, Grayscale has expressed its intention to launch a clone of its main fund, which is expected to have lower fees, according to a March regulatory filing.

Bitcoin ETFs Among Most Successful Funds in History

The group of Bitcoin funds, with a total of $58.5 billion in assets to date, has been hailed as one of the most successful new categories of ETFs. However, critics argue that volatile digital assets may not be suitable for widespread adoption, even within the structure of ETFs.

Global Perspectives on Crypto ETFs

Some countries, such as Singapore and China, have restricted or banned investor access to cryptocurrencies. Vanguard Group, the world’s second-largest asset manager, stated in January that it has no plans to offer any crypto-related products.

Conclusion

Bitcoin’s value has quadrupled since the beginning of last year, driven in part by the introduction of ETFs, marking a strong recovery from the deep bear market experienced in 2022. The SEC’s recent approval of spot Ether ETFs indicates a growing acceptance of cryptocurrency products in traditional financial markets. Investors should watch for further developments as the landscape continues to evolve.