Yesterday, BlackRock’s ETF on Bitcoin spot exceeded 200,000 BTC.
In fact, according to official data, the iShares Bitcoin Trust (IBIT) now holds more than 203,000 Bitcoins as collateral for its over 357 million shares issued on the market.
Summary
The success of BlackRock’s ETF on Bitcoin spot
The iShares Bitcoin Trust, with the ticker IBIT, is BlackRock’s spot Bitcoin ETF. In fact, iShares is the subsidiary of BlackRock that issues and manages ETFs.
It debuted on the markets (on the Nasdaq) on January 11th, and in exactly two months it has raised over 14.5 billion dollars in AUM.
Since it is a passive ETF on Bitcoin, all its shares are fully and exclusively collateralized in BTC, so its AUM is made up only of Bitcoin.
This is the second largest Bitcoin ETF in the world by AUM, after Grayscale’s (GBTC), but the largest by daily trading volumes.
The day of its stock market debut had already exceeded one billion dollars in trading volumes, but starting from February 28th it has surpassed three billion daily for five times. In fact, yesterday it set a new record with almost four billion dollars in trading volumes in a single day.
For example, the iShares Gold Trust (IAU), which is the spot ETF of BlackRock on gold, has an AUM of almost 27 billion dollars, but it has been around for almost 20 years. Furthermore, its daily trading volumes on the stock exchange almost never exceed 300 million dollars, less than a tenth of those of IBIT.
The highest daily trading volume ever of BlackRock’s gold ETF was recorded in March 2022 with nearly $3 billion. IBIT has already surpassed this record six times, despite being on the market for only two months.
Other Bitcoin ETFs
The largest Bitcoin ETF in the world is Grayscale‘s Grayscale Bitcoin Trust (GBTC).
This is a fund that has been in existence for over 10 years, and on January 11th it became an ETF.
GBTC holds about 388,000 BTC, which is less than double that of IBIT. On January 10, it held almost 620,000, but with the launch of the new ETFs on the US stock exchanges on Bitcoin spot, it has effectively given way to the latter, much more convenient for investors.
Note that the AUM of GBTC is over 27 billion dollars, therefore higher than BlackRock’s gold ETF. Given that many capital are moving from GBTC to other Bitcoin ETFs, and in particular to IBIT, it is possible not only that in the coming weeks BlackRock’s Bitcoin ETF surpasses Grayscale’s, but also surpasses the gold one.
In third place is Fidelity’s ETF, FBTC, with 127,000 BTC. Combined, FBTC and IBIT now hold a number of Bitcoins close to that of Grayscale, and it is possible that they will soon surpass it.
However, in total there are 964,000 BTC held by ETFs and similar funds worldwide, so together GBTC, IBIT, and FBTC alone hold almost three quarters of them. The dozens of other funds only hold just over a quarter, most of which are concentrated in seven ETFs, three of which are new.
Entry into other funds
Another very interesting thing is that other ETFs and similar funds are starting to buy shares of spot Bitcoin ETFs.
For example, Patient Capital Management has stated that it intends to invest in this way up to 15% of its $1.4 billion Opportunity Trust.
There are two types of funds, passive and active.
Passive ones, like ETFs on spot Bitcoin, are fully collateralized in a single asset, and therefore passively replicate its price movement.
Active investors, on the other hand, have a portfolio that is not made up of a single asset at 100%, but of different assets whose weights can be modified by the manager. Their goal is to maximize returns, not passively replicate the market price performance of an asset.
Opportunity Trust by Patient Capital Management is an actively managed ETF with $1.4 billion in AUM, and its manager has decided to allocate 15% of its portfolio to Bitcoin through spot ETFs.
It is neither the first nor the last fund to make such a decision, even though 15% is a rather high percentage, since they often stop at 5%.
If other funds were to opt for a similar solution, the influx of capital into spot Bitcoin ETFs could further increase.
