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BlackRock's Bitcoin ETF breaks records and globally becomes the largest fund

BlackRock's network of independent financial advisors and wealth managers has proven to be a significant advantage for the company

Shashank Bhardwaj
Published: May 30, 2024 02:10:48 PM IST
Updated: May 30, 2024 02:11:30 PM IST

BlackRock's Bitcoin ETF breaks records and globally becomes the largest fundImage: Shutterstock 
 
After a five-month wait since the Securities and Exchange Commission (SEC) gave the green light for Bitcoin ETFs, BlackRock's iShares Bitcoin Trust has taken the top spot as the world's largest Bitcoin fund. As of Tuesday, the fund's total assets have reached a whopping $19.68 billion, edging out Grayscale Bitcoin Trust's $19.65 billion fund.

Fidelity Investments' $11.1 billion ETF is currently the third largest in the market, making it the biggest launch in ETF history. Meanwhile, Grayscale's GBTC saw an outflow of $16.09 million on May 22, while BlackRock's IBIT recorded a significant inflow of $91.95 million on the same day. Fidelity's FBTC also saw an inflow of $74.57 million, indicating strong investor interest in these funds.

When the nine new ETFs were introduced in January, Grayscale's fund boasted approximately $29 billion in assets. Since the approval of nine new ETFs and the conversion of Grayscale's publicly traded trust into an exchange-traded product on January 10, market analysts have been closely monitoring the flow of funds into BlackRock's ETF and out of the Grayscale Bitcoin Trust (GBTC.P).

Despite facing significant challenges, including a higher fee of 1.5 percent compared to its peers' 0.2 percent, Grayscale's Bitcoin Trust (GBTC) remained resilient. Even though investors pulled out over 330,000 BTC, the company's BTC holding dropped to around 290,000 bitcoins from its initial holding of more than 600,000 bitcoins.

Since January, investors have shown a significant preference for BlackRock's iShares Bitcoin Trust (IBIT), pouring in $16.5 billion while withdrawing $17 billion from Grayscale's Bitcoin Trust (GBTC). BlackRock's strong distribution network among independent financial advisors and wealth managers has played a crucial role in this shift. Interestingly, Grayscale withdrew its Ethereum futures ETF application just before the SEC was set to decide on at least one spot for the Ether ETF application.

The Securities and Exchange Commission, headed by crypto sceptic Gary Gensler, had previously rejected spot Bitcoin ETFs for over a decade because of concerns about market manipulation. However, the SEC approved these ETFs in January, following Grayscale Investments' successful court challenge last year.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash