Blackrock and Grayscale, two prominent players in the US spot bitcoin exchange-traded funds (ETFs) market, have been engaged in a neck-and-neck race for dominance. Over the past ten trading days, both ETFs have seen positive inflows, with each day recording a steady influx of funds. However, there have been some notable differences in their performance.
During this period, Blackrock’s IBIT has consistently experienced inflows, establishing a clear lead over its competitor. Prior to this, the fund had a few days with no significant inflows or outflows. On the other hand, Grayscale’s GBTC has faced some challenges, with outflows recorded on May 22 and 23. The rest of the ETFs, including BTCO, BRRR, EZBC, and BTCW, have either seen inflows or remained neutral.
The race between GBTC and IBIT goes beyond just inflows and outflows. It is also a race to accumulate bitcoin reserves. Over time, as GBTC has reduced its bitcoin holdings, IBIT has been able to acquire a significant amount through inflows. In fact, a large portion of the bitcoin shed by GBTC may have been acquired by IBIT.
As of May 24, Blackrock’s IBIT holds approximately 287,167.74 BTC, while Grayscale’s GBTC currently holds around 289,040.52 BTC. However, it is worth noting that GBTC held 617,079.99 BTC on January 12, 2024. During the 137 days since then, GBTC has seen mostly outflows, resulting in a divestment of 328,039.47 BTC worth $22.38 billion. In contrast, IBIT’s consistent inflows have allowed it to steadily accumulate bitcoin reserves.
The current gap between the two ETFs is relatively small, with IBIT needing just 1,872.78 BTC to catch up to GBTC’s reserves. If GBTC continues to experience outflows, IBIT could surpass it even more quickly.
This battle for dominance in the bitcoin ETF space has significant implications for the future of bitcoin investment vehicles. With its consistent inflows and GBTC’s persistent outflows, Blackrock’s IBIT has the potential to redefine the landscape of spot bitcoin ETFs, positioning Blackrock at the forefront.
Blackrock is no stranger to leading the ETF market, with its Ishares ETFs being among the largest and most actively traded worldwide. The Ishares Gold Trust (IAU) is one of the largest gold-backed ETFs, while the Ishares Core S&P 500 ETF (IVV) tracks the S&P 500 index. In the near future, the Ishares Bitcoin Trust (IBIT) could become the largest spot bitcoin ETF globally.
As the battle between IBIT and GBTC continues, it will be interesting to see how the dynamics of the bitcoin ETF market evolve. Share your thoughts and opinions on this subject in the comments section below.
