BlackRock’s Bitcoin ETF (BTC) Surges Past GBTC, Achieving $20B Milestone

• BlackRock’s IBIT displaces Grayscale’s GBTC as the largest BTC ETF with nearly $20 billion in assets.
• IBIT could eye Gold ETF as the next target.
• “More context on just how absurd $IBIT is: there’s only been one ETF in history to reach $20b in assets in under 1000 days. $JEPI, which did it in 985 days. $IBIT is a hair away at 137 days” – Eric Balchunas, Bloomberg ETF analyst.

BlackRock’s IBIT overtakes Grayscale’s GBTC as the largest BTC ETF, amassing nearly $20 billion in assets.

BlackRock’s IBIT Flips GBTC as the Top BTC ETF

BlackRock’s Bitcoin ETF, iShares Bitcoin Trust (IBIT), has officially surpassed Grayscale’s GBTC to become the world’s largest BTC ETF, boasting $20 billion in assets. As of May 29th, IBIT held 288.67K BTC, translating to approximately $19.5 billion based on the current market value of $67.7K per BTC. In contrast, Grayscale’s BTC holdings stood at 287.44K on the same date.

Market Dynamics and Investor Behavior

According to market analysts, the shift occurred after GBTC experienced significant outflows on May 28th, amounting to $105.2 million, while IBIT saw inflows of $102.5 million. This flipping marks a significant milestone in the crypto ETF landscape, highlighting the shifting investor preferences and the competitive dynamics between these financial products.

BlackRock Bitcoin ETF Tops After GBTC’s Massive Outflows

Since the GBTC conversion in January, Grayscale has lost over 300K BTC due to heavy outflows, attributed to the firm’s higher fees compared to new entrants. Grayscale held 620,000 BTC at the time of the conversion, which was more than 3% of the circulating supply. However, the firm’s refusal to lower the fee (1.5% vs. 0.2% for peers) led to significant investor pullback, with over 330,000 BTC being withdrawn.

“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. So much for the ‘differentiated’ strategy.”

Investor Sentiment and Future Projections

According to Farside Investors data, GBTC’s record cumulative negative flows hit $17.7 billion on May 29th. Conversely, the BlackRock Bitcoin ETF has seen remarkable net positive flows over the same period, worth $16.5 billion. IBIT’s nearly $20 billion in assets is a notable achievement in the traditional ETF space as well, as highlighted by Bloomberg ETF analyst Eric Balchunas.

“More context on just how absurd $IBIT is: there’s only been one ETF in history to reach $20b in assets in under 1000 days. $JEPI, which did it in 985 days. $IBIT is a hair away at 137 days.”

Nate Geracci of ETF Store suggests that the next target for IBIT could be the iShares Gold ETF, which holds over $29 billion in assets. He remarked, “Would be something if IBIT caught it (iShares Gold ETF) before year-end.”

Conclusion

The rise of BlackRock’s IBIT as the largest BTC ETF underscores the evolving dynamics in the cryptocurrency investment landscape. With nearly $20 billion in assets, IBIT’s rapid growth reflects strong investor confidence and a potential shift in market leadership. As the ETF market continues to develop, IBIT’s next target could be the iShares Gold ETF, setting the stage for further competition and growth in the sector. Investors should keep an eye on these developments as they could significantly impact the broader financial markets and the future of cryptocurrency investments.