- IBIT broke records by becoming the largest Bitcoin fund and achieving $20 billion AUM in under five months.
- Grayscale’s GBTC faced challenges with high fees and market discounts, leading to significant outflows.
- In response, Grayscale launched a new, lower-fee Bitcoin Mini Trust to compete with IBIT and regain market share.
And it’s done! BlackRock has broken the record. Well, two actually.
It took less than five months for the iShares Bitcoin Trust (IBIT) to become both the largest fund to hold Bitcoin and also the fastest fund to ever reach a whopping US$20 billion (AU$30 billion) in assets under management (AUM).
Related: BlackRock Files Updated Spot Ether ETF Applications in Move Toward Trading Launch
Grayscale’s GBTC fund – which converted from a trust to an exchange-traded fund (ETF) with the approval of several Spot Bitcoin ETFs in January – was plagued with high fees and other challenges.
Historically, GBTC operated like a closed-end fund without redemptions, causing its market price to often diverge significantly from the net asset value (NAV). At one point, this discount reached as much as 49%.
GBTC’s high expense ratio of 1.5% made it less attractive compared to newer ETFs like IBIT, which charges only 0.25%. This discrepancy led to significant outflows from GBTC, particularly after it converted to the ETF.
In response to losing market share to more competitively priced offerings like IBIT, Grayscale announced the launch of a new, cheaper ETF, the Grayscale Bitcoin Mini Trust, with a lower expense ratio of 0.15%. This move is intended to recapture market interest and compete more effectively with other spot bitcoin ETFs.
IBIT now holds 289.7K BTC, while GBTC holds 287.6K as data from The Bold Report shows.
BlackRock Quickest to Get to Record Number AUM
Not only is IBIT now the world’s largest Bitcoin fund, but it is also the fund that reached US$20 billion (AU$30 billion) in record time. It hit that milestone faster than any other BTC ETF – but there is also no evidence of any ETF fund other than BTC funds to reach that sum that fast.
BlackRock CEO Larry Fink had called IBIT “the fastest growing ETF ever” in earlier statements.
The company commented in a statement known to Bloomberg:
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.
BlackRock
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