BlackRock’s IBIT Overtakes Grayscale’s GBTC in US Bitcoin ETF Race

BlackRock’s IBIT has now surpassed Grayscale’s GBTC to become the nation’s largest spot Bitcoin ETF. This change occurred after a substantial inflow of $102 million into BlackRock’s ETF on Tuesday, propelling its bitcoin holdings to nearly $20 billion, according to Wednesday morning’s data on its product page.

Grayscale, on the other hand, saw its holdings decrease to $19.7 billion after a $105 million outflow, also reported on Tuesday. This development follows BlackRock’s strategic decision in late May to integrate the bitcoin ETF into some of its income and bond-focused funds. Notably, the Strategic Income Opportunities Fund (BSIIX) now contains over $3.5 million in IBIT, while the Strategic Global Bond Fund (MAWIX) has added $485,000 of the ETF to its portfolio.

BlackRock’s Lower Fees Attract More Investors

This trend underscores the growing appeal of BlackRock’s IBIT, partly due to its competitive fee structure. Unlike Grayscale, which has maintained a 1.5% fee on its GBTC ETF, BlackRock has set a markedly lower fee for IBIT, attracting cost-conscious investors. Analysts point out that Grayscale’s reluctance to reduce its fees, despite significant withdrawals exceeding 330,000 BTC since January 10, 2024, has diminished its attractiveness. In contrast, BlackRock’s fee strategy aligns more closely with market expectations.

The momentum for IBIT has seen a notable increase, fueled by a positive outlook on Bitcoin and the broader cryptocurrency market. This resurgence in investor interest coincided with the approval of ETFs for ether (ETH) and growing political support for cryptocurrencies in the U.S. The sharp turnaround for IBIT, which had experienced minimal inflows and even some outflows as recently as April, highlights the shifting sentiments in the crypto finance sphere.