BlackRock’s iShares Bitcoin Trust has surpassed Grayscale’s GBTC to become the largest spot Bitcoin product in the world. Since its listing earlier this year, the exchange-traded fund has accumulated nearly $20 billion in total assets. Data from HODL15Capital shows that as of Tuesday, the fund held $19.68 billion worth of Bitcoin, surpassing Grayscale’s $19.65 billion. Fidelity Investments holds the third-largest spot with an offering of $11.1 billion. The launch of BlackRock’s Bitcoin ETF, along with Fidelity’s, was part of a group of nine funds that debuted on January 11. The approval of spot Bitcoin ETFs marked a significant milestone for the crypto industry, making Bitcoin more accessible to investors and sparking a rally that saw the token reach a record high of $73,798 by March.
Since its launch, the iShares Bitcoin Trust has attracted the highest inflow, totaling $16.5 billion, while investors have withdrawn $17.7 billion from the Grayscale fund during the same period. Possible factors contributing to the outflows from Grayscale include higher fees and exits by arbitragers. Grayscale has expressed its intention to launch a clone of its main fund with lower fees.
The Securities and Exchange Commission (SEC) approved the first US spot-Bitcoin ETFs in January following a court reversal in 2023. Grayscale had originally created the Grayscale Bitcoin Trust in 2013, which became widely recognized as the largest vehicle of its kind. However, trading of shares in the closed-ended product often deviated significantly from its net asset value, prompting Grayscale’s push for conversion into an ETF to ensure trading at par.
The group of Bitcoin funds, with a total of $58.5 billion in assets to date, has been hailed as one of the most successful new categories of ETFs. However, critics argue that volatile digital assets may not be suitable for widespread adoption, even within the structure of ETFs. Some countries, such as Singapore and China, have restricted or banned investor access to cryptocurrencies. Vanguard Group, the world’s second-largest asset manager, has stated that it has no plans to offer any crypto-related products.
Bitcoin’s value has quadrupled since the beginning of last year, driven in part by the introduction of ETFs, marking a strong recovery from the deep bear market experienced in 2022. Last week, the SEC also signaled its willingness to allow ETFs for Ether, the second-largest cryptocurrency by market value. On May 23, the SEC officially approved 19b-4 applications from various issuers for issuing spot Ether ETFs. However, several ETF issuers removed staking from their final amendments. Grayscale’s forthcoming spot Ethereum ETF may face significant outflows, potentially averaging around $110 million per day, according to analysis firm Kaiko.
