BlackRock’s ETF Overtakes Grayscale, Becomes Top Global Bitcoin Fund With $20B In Assets

In a significant development for the cryptocurrency market, BlackRock’s iShares Bitcoin Trust has become the largest fund dedicated to Bitcoin, accumulating nearly $20 billion in total assets since its US listing earlier this year. 

Bloomberg data reveals that as of Tuesday, the exchange-traded fund held $19.68 billion worth of Bitcoin, surpassing Grayscale Bitcoin Trust’s (GBTC) $19.65 billion position. Fidelity Investments’ offering is the third-largest fund with $11.1 billion in assets.

BlackRock’s iShares Bitcoin Trust Leads Inflows

The launch of the BlackRock and Fidelity Bitcoin ETFs, alongside seven others, on January 11 marked a pivotal moment for the crypto industry. Simultaneously, the Grayscale vehicle, operating for over a decade, transitioned into an ETF. 

These developments significantly increased Bitcoin’s accessibility for institutional and retail investors and triggered a rally in the world’s largest cryptocurrency price, which soared to a record high of $73,700 on March 14.

Since its inception, the iShares Bitcoin Trust has attracted $16.5 billion in inflows, making it the most sought-after fund among investors. Conversely, the Grayscale fund experienced outflows of $17.7 billion during the same period. 

A BlackRock spokesperson told Bloomberg that the firm is pleased with the success of the iShares Bitcoin Trust. The spokesperson noted that investors prefer to access Bitcoin through the “convenience and transparency” of an institutional-grade ETF. The company remains committed to educating investors and providing easy access to Bitcoin.

Bitcoin ETFs Thrive Despite Volatility Concerns

The Securities and Exchange Commission (SEC) reluctantly approved the first US spot-Bitcoin ETFs in January after a court ruling 2023 prompted a reversal in the case brought by Grayscale. 

The move was essential to address issues the closed-ended Grayscale Bitcoin Trust faced, where shares occasionally traded at significant premiums or discounts to its net asset value. 

The group of Bitcoin funds, with a combined total of $58.5 billion in assets to date, represents one of the most successful new categories of ETFs. However, critics argue that the inherent volatility of digital assets makes them unsuitable for widespread adoption, even within ETFs.

While some countries restrict or ban investor access to cryptocurrencies, major asset managers like Vanguard Group have explicitly stated that they have no plans to offer crypto-related products. BlackRock and Vanguard remain the world’s two largest asset management firms.

The introduction of ETFs has aided Bitcoin’s recovery, as its value has quadrupled since the beginning of last year.

Despite a slight dip of less than 1%, with Bitcoin trading at $67,600 on Wednesday, the continued success of the iShares Bitcoin Trust and the growing popularity of cryptocurrency-based ETFs continue to shape the landscape of digital asset investing.

Featured image from Shutterstock, chart from TradingView.com