IBIT Overtakes GBTC As The Biggest Bitcoin ETF: Here's How They Compare

Zinger Key Points
  • The iShares Bitcoin Trust (IBIT) has surpassed Grayscale Bitcoin Trust (GBTC) to become the largest Bitcoin fund with nearly $20 bn AUM..
  • IBIT's rapid growth and lower fees make it a strong competitor, reflecting Bitcoin's increasing mainstream acceptance.

BlackRock Inc.’s iShares Bitcoin Trust IBIT ascended to become the largest Bitcoin fund globally.

The exchange-traded fund (ETF) overtakes long-time leader Grayscale Bitcoin Trust GBTC. This marks a pivotal moment in the competitive landscape of cryptocurrency investment vehicles.

IBIT Vs. GBTC: Assets, Bitcoin, Expense Ratio

Since its inception in January, IBIT has quickly garnered investor interest, accumulating nearly $20 billion in assets. This rapid growth has been driven by its lower expense ratio and BlackRock’s strong reputation in asset management. As of Tuesday, IBIT manages 288,670 BTC, compared to GBTC’s 287,450 BTC, underscoring its new leadership position in the market.

GBTC, which had been the dominant Bitcoin fund, faced challenges due to its structural design as a closed-end fund, leading to significant discounts to its net asset value (NAV). Despite its historical dominance and a peak of $43.6 billion in assets in November 2021, GBTC’s high expense ratio of 1.5% has resulted in substantial outflows, amounting to $105.2 million recently. In contrast, IBIT’s lower expense ratio of 0.25% has made it a more attractive option for investors.

Competition Intensifies

The competitive dynamics between IBIT and GBTC have intensified, with both funds vying for market share.

Tobi Opeyemi Amure, an analyst at Trading.Biz, acknowledged the fierce competition, stating, "Grayscale has proven to be a strong contender in the ETF race and this week's performance is proof of that. Looking at how its market share has increased since the first week of launch, it’s clear that they're surely doing something right. IBIT took only 96 trading days to close the substantial gap with GBTC."

Other analysts and institutional investors are closely monitoring the rivalry between these two funds. While Grayscale has been a household name in crypto institutional investing, its historical performance may not be sufficient to maintain its dominance.

BlackRock’s reduced fees and 12-month waiver period, combined with its prestigious status as one of the world’s leading asset managers, provide a strong competitive edge.

Also Read: BlackRock Moves Closer To Launching First Spot Ethereum ETF

Growing Acceptance Of Bitcoin As An Asset Class

The surge in Bitcoin ETF investments reflects the growing mainstream acceptance of Bitcoin as an asset class. Recent data highlights a positive trend, with Bitcoin ETFs experiencing consecutive days of net inflows in the last weeks of May, culminating in $45.14 million locked in by May 28.

Additionally, liquidity has also flowed into the Fidelity Wise Origin Bitcoin Fund ETF FBTC, with $34.3 million added recently.

This increasing competition among Bitcoin ETFs is a positive indicator for the market, driving innovation and potentially lowering costs for investors. The introduction of new products, such as the Ethereum ETF, further demonstrates the expanding interest in cryptocurrency investment options.

BlackRock’s iShares Bitcoin Trust’s swift rise to the top underscores the dynamic nature of the cryptocurrency investment landscape. With nearly $20 billion in assets and a competitive edge in fees, IBIT has set a new benchmark, challenging established players like GBTC.

As the competition continues to evolve, the increased interest and acceptance of Bitcoin ETFs signal a broader trend of mainstream adoption and growth in the cryptocurrency market.

Read Next: BlackRock’s Bitcoin ETF Dominates Market with Nearly $20B in Assets: Report

Image: Shutterstock

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