Bitcoin
Why BlackRock’s Bitcoin ETF Outperforming Grayscale’s GBTC Is Bullish – DL News
- BlackRock’s Bitcoin ETF has surpassed the size of Grayscale.
- This means that investors can stop paying so much attention to GBTC outflows – and focus on IBIT inflows.
Four months after the launch of spot Bitcoin exchange-traded funds, BlackRock’s iShares Bitcoin Trust, or IBIT, has surpassed the Grayscale Bitcoin Trust, or GBTC, in size.
“It’s official now. IBIT is the king of the category and likely will be for decades,” said Eric Balchunas, ETF analyst at Bloomberg Intelligence. posted on Wednesday.
“Low rates, great liquidity and the iShares brand [are] simply very powerful,” he added.
IBIT closed Tuesday with $19.68 billion in aspirated assets – putting it $30 million ahead of GBTC, according to Bloomberg data.
“This represents a significant shift in the supply/demand equation,” according to crypto market creator Wintermute.
“Since its conversion in January, the GBTC rollback has been considered an oversupply, reducing the positive impact of inflows seen in other vehicles,” Wintermute said.
Grayscale converted its Bitcoin trust into an ETF after receiving approval from the Securities and Exchange Commission to do so.
Now, investors will stop paying as much attention to GBTC, Wintermute said, and will instead focus on IBIT inflows, which “could now drive sentiment and renewed interest in Bitcoin.”
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Battle of the titans
IBIT was launched on January 11 and accumulated revenue in 20 weeks. GBTC, on the other hand, has been around since 2013 and had about $27 billion in assets before being converted into an ETF.
But GBTC’s initial advantage didn’t last. Because of the way the trust was initially designed, GBTC shares could only be created, not redeemed.
This meant that GBTC holders would not be able to withdraw their earnings until the product was converted into an ETF. When that finally happened, the fund saw record outflows of $17 billion.
In other words, GBTC lost more than half of its assets – the only reason they hold close to $20 billion is because the price of Bitcoin appreciated at the same time.
But IBIT’s performance has been equally “absurd,” Balchunas said.
“There has only been one ETF in history that reached $20 billion in assets in less than 1,000 days. [JPMorgan’s] JEPI, who did it in 985 days. IBIT is just a hair away in 137 days”, Balchunas posted.
Tom Carreras is markets correspondent for DL News. Do you have any tips on Bitcoin ETFs? Contact tcarreras@dlnews.com