BlackRock’s iShares Bitcoin Trust Surpasses Grayscale Bitcoin Trust in Assets

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According to Bloomberg News, BlackRock’s iShares Bitcoin Trust has become the world’s largest fund for the leading cryptocurrency, accumulating nearly $20 billion in assets since its U.S. listing in January. The exchange-traded fund (ETF) held approximately $19.68 billion worth of tokens on Tuesday, surpassing Grayscale Bitcoin Trust’s $19.65 billion, as reported by Bloomberg’s data.

However, Reuters could not independently verify these figures. Grayscale’s website states its assets under management as $19.75 billion, and a spokesperson was not immediately available for comment. When nine new ETFs were introduced in January, Grayscale’s fund held around $29 billion in assets.

Market analysts have closely monitored the flow of funds between BlackRock’s ETF and Grayscale Bitcoin Trust since the launch of the new ETFs and the conversion of Grayscale’s publicly-traded trust into an exchange-traded product in January, following approval by the Securities and Exchange Commission (SEC). Despite initial rejection of spot bitcoin ETFs over concerns of market manipulation, the SEC approved them in January after Grayscale Investments successfully challenged a court ruling last year.

However, Grayscale has faced consistent outflows since the launch of its newly converted ETF on January 11, indicating a shift in investor preference towards BlackRock’s ETF. Aniket Ullal, head of ETF data and analytics at CFRA, noted that BlackRock’s growing dominance highlights that being the first mover does not always lead to ultimate success, as early incumbents may face legacy disadvantages.

Grayscale encountered challenges such as selling pressure and a higher fee of 1.5%, compared to the average fee of about 0.25% charged by its competitors like Fidelity Investments and ARK Investments. In contrast, BlackRock has benefited from its robust distribution network among independent financial advisors and wealth managers, attracting significant assets from these channels.

Jay Jacobs, U.S. head of thematic and active ETFs at BlackRock, mentioned that wealth communities and individual advisors have contributed substantially to the inflow of assets into the ETF. While some hedge funds reported large positions in the new ETFs by the end of the first quarter, institutional investors have been slower to embrace them, with Jacobs acknowledging that this adoption process may take years in some cases.