This Is Why BlackRock’s IBIT Became Largest Spot Bitcoin ETF

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BlackRock Surpasses Grayscale’s GBTC to Become World’s Largest Spot Bitcoin ETF
Bybit


In a notable shift in the crypto market, BlackRock’s iShares Bitcoin Trust (IBIT) has overtaken Grayscale Bitcoin Trust (GBTC) to become the world’s largest spot Bitcoin exchange-traded fund (ETF).

Recent data from SoSoValue shows that IBIT now holds $19.68 billion in Bitcoin (BTC), slightly edging out GBTC’s $19.65 billion.

How Grayscale’s GBTC Lost Its Top Spot to BlackRock’s IBIT?

This milestone, occurring nearly five months after the approval of spot Bitcoin ETFs, marks a significant era in crypto-financial products. 

Grayscale charged a 1.5% fee for the GBTC ETF, which is significantly higher than its competitor’s. Hence, Grayscale gradually lost appeal among investors as they preferred alternatives such as BlackRock’s IBIT.

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“Grayscale held 620,000 BTC at the time of the conversion (January 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,” HODL15Capital said.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

BlackRock’s IBIT vs Grayscale GBTC. Source: SoSoValue

Consequently, BlackRock’s achievement highlights the growing institutional interest in Bitcoin and the competitive dynamics within the ETF market.

Meanwhile, GBTC experienced its largest single-day outflow in 18 trading days, totaling $105 million. However, this reduction contrasts with the overall positive trend in the Bitcoin ETF sector, which saw a net inflow of $45.14 million on May 28, 2024. This extends an 11-day streak of net inflows across 11 US Bitcoin ETFs.

Additionally, BlackRock has leveraged its own income and bond-focused funds to invest in IBIT. The BlackRock Strategic Income Opportunities Fund (BSIIX) and the Strategic Global Bond Fund (MAWIX) purchased shares worth $3.56 million and $485,000, respectively, according to recent Securities and Exchange Commission (SEC) filings. Despite this, these investments represent only a fraction of their respective portfolios.

Further broadening the perspective, the total holdings of Bitcoin by ETFs have now surpassed 1 million BTC, constituting nearly 5% of the total Bitcoin supply. This milestone indicates the scale and impact of ETFs within the broader Bitcoin market.

Regionally, the US remains the focal point for Bitcoin inflows, which reached $1.03 billion last week. Moreover, other European countries like Germany and Switzerland also reported significant inflows.

Read more: Crypto ETN vs. Crypto ETF: What Is the Difference?

CoinShares data reflects an overall positive sentiment in the market despite volatile price movements. Digital asset investment products recorded inflows for the third consecutive week, totaling $1.05 billion. This surge in activity pushed the total value of digital asset exchange-traded products (ETPs) close to $98.5 billion.

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