BlackRock’s Bitcoin ETF, the iShares Bitcoin Trust (IBIT), has surpassed the Grayscale Bitcoin Trust (GBTC) in Bitcoin holdings in just 96 trading days. According to K33 Research senior analyst Vetle Lunde, “IBIT needed only 96 days to close GBTC’s huge lead.”
– Holdings Comparison: As of the close of U.S. markets on Tuesday, IBIT held 288,671 BTC, compared to GBTC’s 287,454 BTC.
– Trading Activity: The flip occurred after GBTC experienced $105 million in outflows and IBIT saw $102 million in inflows on the same day, according to Coinglass.
Analysts had anticipated that IBIT would close the gap even sooner due to its aggressive inflows and GBTC’s occasional spikes in deposits, which some suspect were driven by traders using GBTC shares to short Bitcoin.
This milestone comes just a day after the total Bitcoin holdings in the Bitcoin fund category reached 1 million BTC. This total, tracked by HODL15Capital, includes not only the nine new U.S. ETFs and newly converted GBTC but also ETFs in Germany, Canada, and the newly launched funds in Hong Kong.
Since the approval of spot Bitcoin ETFs in January, Grayscale had been confident that GBTC would not be overtaken by BlackRock’s fund. Former Grayscale CEO Michael Sonnenshein had anticipated a spike in outflows once GBTC was converted and in direct competition with funds that had much lower fees.
“We knew coming into this and anticipated that there would be some outflows,” Sonnenshein said in an April podcast interview. He noted that GBTC is the collateral in some bankruptcy estates within the crypto ecosystem, leading to forced liquidations.
The competition between the funds has been intense, particularly in terms of fees. GBTC charges a fee of 1.5%, while rival Bitcoin ETF fees top out at 0.25%. Many new funds offered even lower fees, or none at all, when they first launched, making them more attractive to investors.
Grayscale recently announced that Michael Sonnenshein will be stepping down as CEO in August. However, this announcement did not address the recent developments with GBTC.
The rapid success of BlackRock’s IBIT demonstrates the increasing competition and dynamic nature of the crypto ETF market. With significant inflows and strategic fee structures, new players like IBIT are challenging established funds like GBTC, indicating a shift in investor preferences and market strategies.