BlackRock’s IBIT Overtakes Grayscale’s GBTC to Become Largest Bitcoin Fund

BlackRock’s spot Bitcoin ETF, IBIT, has ascended to the top as the most significant Bitcoin fund, surpassing Grayscale’s long-dominant GBTC.

IBIT reached this significant level on Tuesday, May 28, after recording over $100 million in inflows. Meanwhile, Bitcoin has slipped off the $70,000 threshold and appears stuck around the $68,000 region, with a 3% decline in the past seven days. 

Rapid Growth of BlackRock’s IBIT

Since its launch just four months ago, BlackRock’s spot BTC ETF, under the ticker symbol $IBIT, has achieved remarkable growth. The ETF has amassed nearly $19.79 billion in AUM, showcasing substantial investor interest and confidence.

Conversely, Grayscale’s Bitcoin Trust (GBTC), a pioneer in the Bitcoin ETF space, has recorded a notable decline. Over the same four-month period, GBTC’s AUM shrank by approximately $18 billion, bringing its total down to $19.75 billion.

On May 28, the Bitcoin ETF market witnessed significant activity with total net inflows of 632 BTC, equivalent to $43.3 million. This marked the eleventh consecutive day of positive net inflows for Bitcoin ETFs, reflecting the sustained interest in these financial products.

BlackRock led these inflows by adding 1,505 Bitcoin (worth $102 million) to its holdings, surpassing Grayscale. Fidelity also recorded notable inflows, adding 505 BTC (worth $34 million), whereas Grayscale faced net outflows of 1,550 BTC (worth $105 million).

Furthermore, to strengthen its investment offerings, BlackRock has also integrated nearly $4.1 million of IBIT shares into two other funds.

According to a recent SEC filing, BlackRock added $3.56 million worth of IBIT shares to its BlackRock Strategic Income Opportunities Portfolio (BSIIX). During the same period, it said $486,000 worth of IBIT shares to its BlackRock Strategic Global Bond Fund (MAWIX).

Market Implications and Bitcoin ETFs Dominance

The rise of BlackRock’s IBIT as the most significant Bitcoin fund signifies a pivotal shift in the broader crypto investment sector. It highlights the growing institutional acceptance of Bitcoin and the increasing preference for regulated investment products.

BlackRock’s success reflects the market’s competitive nature, where innovation and investor trust are crucial in determining market leadership.

Meanwhile, institutional investors have significantly strengthened BTC ETFs, which now control around 5% of the total Bitcoin supply.

Blockchain analytics platform Dune reports that U.S. spot BTC ETFs collectively hold about 842,000 BTC, valued at approximately $57.4 billion. This represents 4.27% of the current circulating Bitcoin supply.

On a global scale, BTC ETF issuers possess around 1,002,343 BTC. Michael Saylor, MicroStrategy’s co-founder and former CEO, highlighted this figure in a screenshot shared on X (formerly Twitter).

In the meantime, BTC trades between $67,000 and $70,000, although mostly below the critical resistance level of $70,000.

Michael van de Poppe says this range is significant for predicting Bitcoin’s short-term price behavior. He emphasizes the importance of the $67,000 support level and warns that if Bitcoin falls below this threshold, it could drop to between $60,000 and $62,000. 

However, he also pointed out that such a decline might create attractive buying opportunities for investors looking to enter the market or increase their holdings.