BlackRock’s iShares Bitcoin Trust has emerged as the world’s largest Bitcoin fund, amassing nearly $20 billion in assets since its launch earlier this year. This surpasses the Grayscale Bitcoin Trust, which held $19.65 billion in assets. Fidelity Investments holds the third-largest spot with an offering of $11.1 billion.
BlackRock’s Bitcoin ETF, along with Fidelity’s, was part of a group of nine funds that debuted on January 11, coinciding with Grayscale’s conversion into an ETF. The approval of spot Bitcoin ETFs was a significant milestone for the crypto industry, making Bitcoin more accessible to investors and driving 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its launch, the iShares Bitcoin Trust has attracted the highest inflow, totaling $16.5 billion, while investors have withdrawn $17.7 billion from the Grayscale fund during the same period.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 initially 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 the push for conversion into an ETF.
The group of Bitcoin funds, with a total of $58.5 billion in assets to date, is considered one of the most successful new categories of ETFs. However, critics argue that volatile digital assets may not be suitable for widespread adoption. Some countries, such as Singapore and China, have restricted or banned investor access to cryptocurrencies. Vanguard Group 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. The SEC has also signaled its willingness to allow ETFs for Ether, the second-largest cryptocurrency by market value. Several ETF issuers, including VanEck, BlackRock, and Fidelity, have been approved to issue spot Ether ETFs.
