BlackRock’s IBIT flips Grayscale’s GBTC to lead US spot Bitcoin ETFs

BlackRock’s IBIT has surpassed Grayscale’s GBTC, becoming the largest spot bitcoin ETF in the U.S.

The latest flip comes after BlackRock’s spot bitcoin exchange-traded fund (ETF) saw a $102 million inflow on Tuesday.

IBIT now holds nearly $20 billion worth of bitcoin, as reported on its product page on Wednesday morning. In contrast, GBTC holds $19.7 billion after experiencing $105 million in outflows on the same day.

On May 28, BlackRock incorporated the bitcoin ETF into its income and bond-focused funds during the first quarter. The firm’s Strategic Income Opportunities Fund (BSIIX) holds over $3.5 million worth of IBIT, while its Strategic Global Bond Fund (MAWIX) holds $485,000.

This development, nearly five months after the approval of spot Bitcoin ETFs, marks a significant milestone in crypto-financial products.

Grayscale charged a 1.5% fee for the GBTC ETF, which is considerably higher than BlackRock’s IBIT. As a result, Grayscale gradually lost appeal among investors who preferred the lower fees offered by IBIT.

“Grayscale held 620,000 BTC at the time of the conversion (January 10, 2024), which was more than 3% of circulating supply, but refused to lower the fee (1.5% vs 0.2% for peers), even after investors pulled 330,000+ BTC. So much for the ‘differentiated’ strategy,” HODL15Capital said.

Meanwhile, buying activity for IBIT has ramped up recently due to bullish sentiment for Bitcoin and the broader crypto market. The momentum was further supported by the listing approval for ether (ETH) ETFs and renewed support for crypto among U.S. political parties.

This led to a sudden shift in IBIT, which recorded low or zero inflows before May 15 and saw its first-ever day of outflows in April, leading to bearish sentiment.