Bitcoin ETF Giant: BlackRock’s IBIT Takes the Lead Over Grayscale

BlackRock’s IBIT Overtakes Grayscale as the World’s Biggest Bitcoin ETF

In an electrifying turn of events in the crypto world, BlackRock’s iShares Bitcoin Trust (NASDAQ) has leapfrogged Grayscale Bitcoin Trust (BTC) (NYSE) to become the largest Bitcoin ETF on the planet. This seismic shift underscores a pivotal moment in the cryptocurrency investment landscape.

As of Tuesday, BlackRock’s IBIT boasts an impressive $19.68 billion in Bitcoin holdings, edging out Grayscale’s $19.65 billion, according to Bloomberg data. Fidelity Investments’ Bitcoin fund trails behind as the third-largest, with $11.1 billion in assets.

This leap by IBIT wasn’t unexpected. Grayscale’s holdings took a nosedive, plunging by 50% as the Bitcoin halving approached. GBTC’s holdings shrank from 619,220 BTC on January 11 to their current levels.

Since its inception, the iShares Bitcoin Trust has attracted a whopping $16.5 billion in inflows. In stark contrast, Grayscale has seen $17.7 billion in outflows, driven by higher fees and exits by arbitragers.

Looking at the trends, BlackRock’s IBIT saw a slowdown in net flows after peaking on March 13, when it raked in $866 million in new capital. Despite this, IBIT’s holdings have skyrocketed by over 10,200%, ballooning from 2,621 BTC at launch.

In response, Grayscale is scrambling to stem its losses with plans to launch a second ETF that tracks spot Bitcoin prices with a lower fee of 0.15%. The world’s largest crypto asset manager aims to spin off part of its existing GBTC to seed this new ‘mini’ ETF.

The total assets of Bitcoin funds have soared to $58.5 billion, marking them as one of the hottest new ETF categories. However, critics caution that the volatility of digital assets might hinder their suitability for mainstream adoption within ETFs.

Countries like Singapore and China maintain strict regulations or outright bans on cryptocurrency investments. Despite these challenges, Bitcoin has quadrupled in value since the beginning of last year, driven by the debut of ETFs and a robust recovery from the bear market of 2022.

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