NEW YORK: BlackRock’s iShares Bitcoin Trust (IBIT) has become the world’s largest fund for the world’s largest cryptocurrency, racking up nearly US$20bil in total assets since listing in the United States in January, Bloomberg News reports.
The exchange-traded fund (ETF) held US$19.68bil of token on Tuesday, overtaking Grayscale Bitcoin Trust’s US$19.65bil, the report said, citing data compiled by Bloomberg.
Reuters could not independently verify those numbers. Grayscale’s product website cites its assets under management as being US$19.75bil. A spokesperson could not be reached for comment.
When the nine new ETFs launched in January, Grayscale’s fund had about US$29bil in assets.
Market analysts have been keeping a keen eye on the relative flows into BlackRock’s ETF and out of the Grayscale Bitcoin Trust since US regulators approved the launch of nine new ETFs and the conversion of Grayscale’s publicly-traded trust into an exchange-traded product on Jan 10.
The Securities and Exchange Commission, which is led by crypto sceptic Gary Gensler, had rejected spot bitcoin ETFs for more than a decade over market manipulation worries, but approved them in January after Grayscale Investments won a court challenge last year.
This has proved a short-lived victory for Grayscale, which has been hit by steady outflows since its newly converted ETF began trading Jan 11.
BlackRock’s growing dominance of the ultra-competitive new spot bitcoin landscape “is a reminder that being the first mover doesn’t necessarily mean that someone ends up as the biggest winner,” said Aniket Ullal, head of ETF data and analytics at CFRA.
Early incumbents can have legacy disadvantages, he noted.
From the outset, Grayscale battled headwinds ranging from selling pressure and a fee of 1.5%, notably higher than the average of about 0.25% charged by its new rivals, which also include firms like Fidelity Investments and ARK Investments.
Meanwhile, CFRA’s Ullal noted that BlackRock has benefited from its strong distribution network among independent financial advisers and wealth managers.
“We’re seeing significant assets moving into the ETF from the wealth community” as well as from individual advisers, Jay Jacobs, US head of thematic and active ETFs, told Reuters Tuesday ahead of the Bloomberg report.
“A lot of early movers went from direct ownership of digital assets to IBIT,” Jacobs added.
“Some of those accounts had millions of dollars” invested in the cryptocurrency. — Reuters
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