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BlackRock’s Bitcoin exchange-traded fund has reached $10 billion faster than any U.S. ETF in history, boosted by a bull market that continues to send the world’s largest cryptocurrency to record heights.
BlackRock’s iShares Bitcoin Trust (IBIT) reached that goal in less than two months after its launch on January 11, beating Invesco QQQ’s record of just over a year, according to Morningstar. IBIT’s total assets currently stand at approximately $12.7 billion, including Bitcoin appreciation and net inflows of over $7 billion.
IBIT and nine other spot Bitcoin ETFs, which were given the green light by the Securities and Exchange Commission on January 11, are on the rise as of Friday, after Friday’s rise in Bitcoin prices exceeded $70,000 and hit new highs. The price has settled around $68,500. afternoon.
The 10 Spot Bitcoin ETFs collectively earned about $7 billion in net inflows from their launch in mid-January to the end of February, according to data from Morningstar Direct, which included investors taking in $27.5 billion in net inflows from their launch in mid-January to the end of February. It also includes $8.5 billion withdrawn from the Grayscale Bitcoin Trust ETF (GBTC). . The Fidelity Wise Origin Bitcoin ETF has amassed approximately $7.6 billion in assets and is positioned to be the second fastest to reach $10 billion, behind peer iShares.
Much of the recent investment in Bitcoin ETFs appears to be from investors who have become “trapped in GBTC” and exited the most expensive Bitcoin ETFs in favor of cheaper alternatives, says longtime ETF observer Bit. said Dave Nadig, who studies coin ETFs. trading pattern.
Much of the high volume of Bitcoin ETFs in recent weeks has come from high-frequency traders, Nadig said. “It’s just an algo player trying to scalp a penny.”
While high-frequency traders and hedge funds are increasingly interested in Bitcoin ETFs and their arbitrage potential, retail investors appear to be the bulk of the new assets driving BlackRock’s new crypto products.
“The buyers of these are primarily individual investors who are looking to access cryptocurrencies through tax-advantaged retirement or brokerage accounts,” said Zach Pandle, director of research at Grayscale.
Since GBTC was founded more than a decade ago, it has gotten a head start on Bitcoin ETF assets in a structure that makes it difficult for investors to easily exit. However, investors are now moving away from the fund and its 1.5% management fee, as they can more efficiently move their holdings to lower-cost alternatives, and some are waiving the fee altogether. Some are.
“We are very proud of GBTC and what it means to the industry, and we intend to make this a competitive product in the long term,” said Pandl.
The rally following the SEC’s long-awaited Spot Bitcoin ETF approval has been so strong that the Grayscale ETF’s net worth has nearly recovered since its conversion, allowing long-term holders to exit and absorb Bitcoin’s significant gains over the past decade. I was able to profit from the rise.
JPMorgan and State Street Global Advisors’ recent launches all reached the $10 billion mark in about two years, according to Morningstar. State Street’s SPDR Gold Shares ETF (GLD), launched in late 2004, also reached $10 billion relatively quickly, clearing that mark in early 2007.
“Expectations were high, and they were significantly exceeded,” said James Seifert, research analyst at Bloomberg Intelligence. “Demand is being brought forward much faster.”
Seifert said Bitcoin has become more secure since the ETF’s launch in January. “It’s much less likely that this will go to zero, especially after the SEC approves these ETFs, which removes some of the downside risk,” he said.
Bitcoin ETFs from iShares, Fidelity and Cathie Wood’s Ark Investment Management have attracted the most new money since launch, while Wisdom Tree, Valkyrie and Franklin Templeton have taken in the most new funds since their launch, according to data from Morningstar Direct. Similar products did not perform as well.
WisdomTree’s $58 million Bitcoin ETF has been less fortunate in attracting assets compared to its peers, but despite not capturing iShares-level volume, “It’s one of the most successful in the world,” Will Peck said. , Head of Digital Assets at WisdomTree.
“It helps that Bitcoin has been in tatters since it was launched,” Peck said. “We expected it to be a ‘buy the rumor, sell the news’ situation, but it shows how difficult it is to know anything about this asset class.”
