(Bloomberg) — BlackRock Inc.'s iShares Bitcoin Trust. has become the world's largest native cryptocurrency fund, amassing almost $20 billion in total assets since listing in the US earlier this year.
The exchange-traded fund held $19.68 billion of the token on Tuesday, dethroning the $19.65 billion Grayscale Bitcoin Trust, data compiled by Bloomberg show. The third largest is the $11.1 billion offering from Fidelity Investments.
The BlackRock and Fidelity Bitcoin ETFs were among nine that debuted on Jan. 11, the same day Grayscale's more than decade-old vehicle converted to an ETF. The launches were a benchmark for crypto, making Bitcoin more accessible to investors and fueling a surge to a record high of $73,798 in March.
The iShares Bitcoin Trust has attracted the largest inflow since its inception, $16.5 billion, while investors have withdrawn $17.7 billion from the Grayscale fund over the same period. The latter's higher fees and arbitrage exits have been cited as potential drivers of exits.
“IBIT's success underscores investors' preference for accessing Bitcoin through the convenience of the ETF vehicle in an institutional-grade product,” a BlackRock spokesperson said in a statement. “We remain focused on educating investors and providing access to Bitcoin with ease and transparency.”
Grayscale Investments LLC did not immediately respond to a request for comment outside regular U.S. business hours. Gray stairs intends to start a clone of its flagship fund, according to a March regulatory filing, and fees are expected to be lower, a person familiar with the matter said at the time.
The Securities and Exchange Commission reluctantly gave the green light to the first US spot-Bitcoin ETFs in January after a change of court in 2023 in a case filed by Grayscale.
The firm created the Grayscale Bitcoin Trust in 2013 and became known as the largest such vehicle. But shares in the closed-end product sometimes traded at significant premiums or discounts to its net asset value, prompting Grayscale to push for a conversion to an ETF to ensure trading at face value.
SEC Pivot
Last week, the SEC surprisingly steered right allowing ETFs for Ether, a token that ranks second only to Bitcoin in market value. The agency headed by Gary Gensler is skeptical of the crypto industry in general after a series of scandals.
The Bitcoin group of funds — with $58.5 billion in assets to date — has been hailed as one of the most successful new ETF categories. But critics argue that volatile digital assets are not suitable for widespread adoption, even within ETFs.
Some countries, such as Singapore and China, either curb or prohibit the entry of investors. In the US, a spokesperson for the Vanguard Group said in January that the firm has no plans to offer any crypto-related products. BlackRock and Vanguard are the two largest asset managers in the world.
Bitcoin has quadrupled since the start of last year, aided by ETFs, in a strong recovery from a deep market in 2022. The token fell less than 1% to $67,757 as of 7:39 a.m. on on Wednesday in New York.
Read more about crypto ETFs: