In a notable change in the cryptocurrency market, BlackRock’s iShares Bitcoin Trust (IBIT) has surpassed Grayscale Bitcoin Trust (GBTC) to become the world’s largest Bitcoin exchange-traded fund (ETF).
According to recent data from SoSoValue, IBIT currently holds $19.68 billion in Bitcoin (BTC), slightly ahead of GBTC’s $19.65 billion.
How did Grayscale’s GBTC lose its #1 spot to BlackRock’s IBIT?
This milestone, which comes nearly five months after the approval of the spot Bitcoin ETF, marks an important era for cryptocurrency financial products.
Grayscale charged a 1.5% fee for the GBTC ETF, much higher than its competitors. Grayscale has therefore gradually lost appeal among investors in favor of alternatives such as BlackRock’s IBIT.
“Grayscale held 620,000 BTC at the time of conversion (January 10, 2024), which was over 3% of the circulating supply, but refused to reduce its fees even after investors pulled 330,000+ (1.5% vs. 0.2% for its peers). %). BTC. So much for HODL15Capital’s “differentiated” strategy.
Read more: How to Trade Bitcoin ETFs: A Step-by-Step Approach
As a result, BlackRock’s performance highlights the growing institutional interest in Bitcoin and the competitive dynamics within the ETF market.
Meanwhile, GBTC recorded its highest daily outflow of $105 million in 18 trading days. However, this decline contrasts with the overall positive trend in the Bitcoin ETF sector, which recorded net inflows of $45.14 million on May 28, 2024. This extends net inflows across 11 US Bitcoin ETFs to the 11th consecutive day.
Additionally, BlackRock invested in IBIT using its own revenues and bond-focused funds. BlackRock Strategic Income Opportunities Fund (BSIIX) and Strategic Global Bond Fund (MAWIX) purchased $3.56 million and $485,000 worth of shares, respectively, according to recent filings with the Securities and Exchange Commission (SEC). Nonetheless, these investments are only a small portion of that portfolio.
To put this into perspective, the ETF’s total Bitcoin holdings now exceed 1 million BTC, accounting for nearly 5% of the total Bitcoin supply. This milestone signals the ETF’s size and impact within the broader Bitcoin market.
Regionally, the United States remains the center of Bitcoin inflows, reaching $1.03 billion last week. Moreover, other European countries, including Germany and Switzerland, have also reported significant influxes.
Read more: Cryptocurrency ETNs and Cryptocurrency ETFs: What’s the Difference?
CoinShares data reflects the overall positive sentiment in the market despite volatile price movements. Digital asset investment products recorded inflows of $1.05 billion for three consecutive weeks. This surge in activity brings the total value of digital asset exchange-traded products (ETPs) close to $98.5 billion.
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