Author: Pomelo, ChainCatcher
On May 29th, BlackRock’s iShares Bitcoin Spot ETF (IBIT) surpassed Grayscale’s GBTC to become the largest Bitcoin spot ETF in terms of BTC holdings.
According to HODL15Capital data, on May 28th, approximately $102 million (1,503 BTC) flowed into BlackRock’s Bitcoin spot ETF, bringing the total BTC holdings to over 288,670, equivalent to a value of $19.795 billion.
On the same day, Grayscale’s GBTC experienced an outflow of over $105 million (approximately 1,543 BTC), marking the largest outflow in the past two weeks. GBTC’s BTC holdings amount to around 287,450, with a value of $19.758 billion.
With IBIT’s BTC holdings surpassing GBTC and leading by over $30 million, it has become the largest Bitcoin spot ETF in the world.
In just four months since its launch, IBIT has attracted approximately $20 billion in BTC investments, making it one of the fastest-growing ETFs in history.
ETF analyst Eric Balchunas from Bloomberg commented on IBIT’s impressive performance, stating that it is a legend in its own right. Only one ETF in history has reached $20 billion in assets within less than 1,000 days, with JEPI taking 985 days to achieve this milestone, while IBIT accomplished the same scale in just around 137 days.
Data from SoSoValue shows that since its launch on January 11th, IBIT has consistently experienced positive inflows for over three months until mid-April.
On its first day of trading, IBIT attracted over $110 million in investments when the price of BTC was $46,000. On March 12th, the inflow reached its peak at approximately $848 million, and the next day (March 13th), BTC hit a record high of $73,700.
Eric Balchunas attributes IBIT’s growth to its low fees, high liquidity, and the strong influence of BlackRock’s iShares brand. He also noted that while the total number of transactions for IBIT has decreased recently, the average transaction size has increased, indicating larger institutional investors replacing retail investors.
Behind the outflow of funds from GBTC lies the high fees and the risk of premium or discount. GBTC, as a Bitcoin trust fund, requires investors to entrust their money to Grayscale, which then purchases and holds cryptocurrencies on behalf of investors and issues shares representing their holdings in the trust fund. However, investors can only buy shares on the secondary market and are unable to redeem them.
The price of GBTC shares is related to the quantity and market value of the Bitcoin it holds, but it often experiences significant premiums or discounts. Premiums refer to the situation where the price of GBTC shares is higher than the per-share value of the Bitcoin it holds, while discounts refer to the situation where the price is lower.
Bitcoin spot ETFs, on the other hand, directly hold Bitcoin and their prices align with the market price without premiums or discounts.
In January of this year, the SEC approved GBTC’s conversion into a Bitcoin spot ETF, allowing investors to freely redeem their fund shares for cash through authorized participants (APs). This means that GBTC holders cannot cash in their profits until the product is converted into an ETF.
The outflow of funds from GBTC can be attributed to two main reasons: the high management fees, which are five to six times higher than competitors, with GBTC’s management fee at around 1.5% compared to approximately 0.2% or lower for Bitcoin spot ETFs, and the ability to avoid the risk of premiums or discounts associated with GBTC. The lack of redemption mechanism for GBTC can result in significant differences between the fund price and the market value of Bitcoin, while the price of Bitcoin spot ETFs closely align with the market price.
According to SoSoValue data, GBTC has experienced continuous outflows for four months since the launch of Bitcoin ETFs, although the outflow rate has decreased in May.
As of May 30th, the total assets under management for GBTC amounted to $19.28 billion, with approximately 332,000 BTC outflowed in the past four months, still holding around 287,000 BTC.
With IBIT’s assets under management surpassing $200 million, it has become a new driving force behind the Bitcoin price trend.
Market maker Wintermute commented, “This represents a significant shift in the BTC supply and demand landscape. Investors will now focus on the inflows and outflows of IBIT rather than GBTC, which may drive attention towards Bitcoin ETFs or the underlying BTC.”
As of May 30th, the total net asset value of Bitcoin spot ETFs reached $57.683 billion, with IBIT accounting for over 33.7% of the market share.
Among them, there are three Bitcoin ETFs with assets over $10 billion, including IBIT ($19.48 billion), GBTC ($19.28 billion), and FBTC ($10.94 billion).
Represented by IBIT, Bitcoin spot ETFs are becoming the gateway for traditional capital to enter the crypto field. Compared to the institutional wave brought by Grayscale in the previous cycle, this time, global asset management giants like BlackRock are bringing in even more substantial amounts of capital.