Key Points
- BlackRock’s IBIT has overtaken Grayscale’s GBTC to become the largest spot Bitcoin ETF in the U.S.
- IBIT’s success is attributed to its lower fees and bullish sentiment towards Bitcoin and the broader crypto market.
BlackRock’s spot Bitcoin exchange-traded fund (ETF), known as IBIT, has now become the largest of its kind in the U.S.
This development comes after IBIT experienced an inflow of $102 million on a single Tuesday.
IBIT vs GBTC
As of Wednesday, IBIT holds nearly $20 billion worth of Bitcoin, as stated on its product page.
In comparison, GBTC holds $19.7 billion after witnessing $105 million in outflows on the same day.
BlackRock integrated the Bitcoin ETF into its income and bond-focused funds in the first quarter, on May 28.
The company’s Strategic Income Opportunities Fund (BSIIX) has over $3.5 million worth of IBIT, while its Strategic Global Bond Fund (MAWIX) holds $485,000.
This marks a significant milestone in crypto-financial products, nearly five months after the approval of spot Bitcoin ETFs.
Investor Preferences
Grayscale’s GBTC ETF charges a 1.5% fee, significantly higher than BlackRock’s IBIT.
As a result, Grayscale has gradually lost its appeal among investors who prefer the lower fees offered by IBIT.
Grayscale held 620,000 BTC at the time of the conversion on January 10, 2024, which was more than 3% of the circulating supply.
However, the company refused to lower the fee, even after investors withdrew 330,000+ BTC.
Meanwhile, the buying activity for IBIT has increased recently due to positive sentiment for Bitcoin and the broader crypto market.
The momentum was further boosted by the listing approval for Ethereum ETFs and renewed support for crypto among U.S. political parties.
This led to a sudden shift in IBIT, which previously recorded low or zero inflows before May 15 and experienced its first-ever day of outflows in April.
