BlackRock ETF Closing in on Grayscale Market Share Despite Low Inflows

BlackRock’s spot Bitcoin ETF, iShares Bitcoin Trust (IBIT), has established a commanding market presence, edging closer to the dominance of Grayscale’s Bitcoin Trust (GBTC), according to data released on April 17.

IBIT’s Impressive Growth in the Spot Bitcoin ETFs Market

The Dune data shows that IBIT boasts $19 billion worth of Bitcoin with a current market share of 32.6%, inching closer to GBTC’s 36.8% market share. This report comes amid IBIT’s second-lowest daily inflows of $24.9 million since its launch.

IBIT was approved on January 10, and its current market share highlights an impressive growth sequence. Since then, BlackRock ETF Bitcoin holdings have grown by over 10,200%, amassing 272,550 BTC valued at $16.8 billion. The fund needs about $2.2 billion to close in on Grayscale’s holdings.

Blackrock's Bitcoin ETF, IBIT, now holds 272,844 BTC, up 296 from the last trading day

900 BTC are issued per day right now

TOMORROW IS THE HALVING

Supply will drop to 450 Bitcoin per day 🤯

Blackrock clients bought ~30% of the amount of BTC that was produced in the day https://t.co/3e755eximF pic.twitter.com/NA4ROsKrUU

— Rajat Soni, CFA (@rajatsonifnance) April 18, 2024

Grayscale’s market share has plummeted substantially following the conversion of its GBTC into an ETF. Before the conversion, Grayscale held about 620,000 BTC, but its holdings have dropped by over 45% since then. Grayscale’s holdings stand at 308,105 BTC as of writing.

IBIT’s impressive attainment has sparked M&A discussions, with some analysts suggesting that an IBIT takeover could be around the corner.

While both ETFs have had a slowdown in accumulation and selling patterns in recent weeks, IBIT’s $866 million net inflows on March 13 and GBTC’s $607 million outflows on March 19 (its fourth-largest since inception) suggest that the broader market sentiment might be shifting in favor of BlackRock.

Additionally, GBTC’s high trading fee of 1.5% – the highest among all U.S. spot Bitcoin ETF issuers could impact patronage. In contrast, BlackRock’s IBIT charges a modest 0.25% fee, while Franklin Templeton’s ETF offers an even lower fee of 0.19%.

Despite IBIT’s notable growth, the spot Bitcoin ETFs market has experienced dwindling net inflows recently.

Volatility Amid the Battle for Spot Bitcoin ETF Dominance

According to data from Farside Investors

, IBIT recorded net inflows of $73.4 million on April 15, lower than the previous day’s inflow of $111.1 million.

However, aside from Grayscale’s GBTC, the other eight ETFs reported no inflows during that period, which contributed to BlackRock’s growing market share in the Bitcoin ETF segment.

The ten-spot Bitcoin ETFs recorded a net outflow of $91.8 million between April 12 and April 15. These outflows coincided with a volatile week for Bitcoin, which saw a 9.54% price drop to about $63,000 as of writing.

Globally, Bitcoin investment products experienced $110 million in outflow between April 12 and 17, indicating investor “hesitancy,” according to CoinShares’ James Butterfill.