BlackRock’s spot Bitcoin exchange-traded fund (ETF), the iShares Bitcoin Trust (NASDAQ: IBIT), has surpassed Grayscale Bitcoin Trust (NYSE: GBTC) in total holdings, emerging as the world’s largest fund for the flagship cryptocurrency.
BlackRock’s IBIT held $19.68 billion in Bitcoin, slightly edging out the $19.65 billion held by the Grayscale Bitcoin Trust, according to data compiled by Bloomberg. Fidelity Investments’ Bitcoin fund ranks third with $11.1 billion in assets.
The ascension of IBIT to the top spot was anticipated, as GBTC’s Bitcoin holdings had dropped by 50% leading up to the Bitcoin halving event. GBTC’s holdings fell from 619,220 BTC on January 11 to their current levels.
Since its inception, the iShares Bitcoin Trust has attracted $16.5 billion in inflows, while the Grayscale fund experienced withdrawals totaling $17.7 billion over the same period. Analysts attribute the outflows from Grayscale to its higher fees and the exits of arbitragers.
Despite a deceleration in net flows since peaking on March 13, when the fund received $866 million in new capital, BlackRock’s holdings have surged by over 10,200%, growing from 2,621 BTC at launch.
In response to its declining holdings, Grayscale is planning to launch a second ETF that tracks spot Bitcoin prices with a reduced fee of 0.15%. This new ETF will be partially funded by spinning off a portion of the existing Grayscale Bitcoin Trust (GBTC).
The collective assets of Bitcoin funds now total $58.5 billion, making them one of the most successful new ETF categories. However, critics argue that the inherent volatility of digital assets may limit their suitability for widespread adoption, even within ETFs.
While some countries, such as Singapore and China, either restrict or ban investor access to cryptocurrencies, Bitcoin has quadrupled in value since the start of last year. This surge has been driven by the debut of ETFs and a robust recovery from the deep bear market of 2022.
