Bitcoin ETFs Show No Sign of Slowing Down
BlackRock's now overtaken Grayscale as the most popular spot BTC ETF — and there's growing conviction that fresh all-time highs are inevitable.
BlackRock's now overtaken Grayscale as the most popular spot BTC ETF — and there's growing conviction that fresh all-time highs are inevitable.
Spot Bitcoin ETFs in the U.S. are basking in the glow of 19 consecutive days of inflows, as the world's biggest cryptocurrency flirts with new all-time highs.
Data from SoSo Value shows that a staggering $886.75 million was invested into these exchange-traded funds on June 4 alone. That's the highest figure since March 12, when $1.05 billion entered the market as Bitcoin accelerated beyond $70,000.
BlackRock's iShares Bitcoin Trust (IBIT) remains the undisputed market leader with $21.07 billion in assets under management — an impressive feat considering it only launched in January. And in a landmark development, it's now leapfrogged the Grayscale Bitcoin Trust. GBTC initially launched in 2013, but the pioneering investment product regularly suffered huge disparities when compared with Bitcoin's spot price.
As you might expect, BlackRock wasted little time in cracking open the champagne, with a spokesperson declaring:
"The success of IBIT underscores investors preference to access Bitcoin through the convenience of the ETF vehicle in an institutional-grade product. We remain focused on education for investors and providing access to Bitcoin with convenience and transparency."
Fees are a big factor here. IBIT has a sponsor's fee of 0.25%, far less than the 1.5% levied by GBTC, the most expensive in the market. Grayscale does have plans to fight back, though. It's currently vying to become more competitive by working on the so-called "Bitcoin Mini Trust" that would boast fees of just 0.15%, making it a market leader once again.
Ever-bullish traders argue the seemingly insatiable demand for Bitcoin ETFs will inevitably push the cryptocurrency to record highs — especially considering these funds are buying substantially more BTC than is being created on a daily basis following the halving. Optimism is also continuing to build about the Federal Reserve cutting interest rates, but reductions have been pushed back time and time again because of a slew of disappointing economic data.
BTC ETFs ultimately clocked almost $27 billion of inflows during the first three months of 2024 — a pretty impressive feat. But it's worth bearing in mind that, over the same period, the whole ETF market brought in $195 billion. Vanguard, the most popular provider in U.S. markets, was responsible for $66 billion of this — but has bowed out of offering Bitcoin ETFs because it regards crypto as "more of a speculation than an investment."
Undeterred, investors continue to pile in to BTC ETFs. New all-time highs may only accelerate inflows further.