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BlackRock ETF becomes world’s largest bitcoin fund, Bloomberg News reports
By Suzanne McGee
(Reuters) – BlackRock’s iShares Bitcoin Trust has become the world’s largest fund for the world’s largest cryptocurrency, amassing nearly $20 billion in total assets since it listed in the United States in January, Bloomberg reported News Wednesday.
The exchange traded fund held $19.68 billion in tokens as of Tuesday, surpassing Grayscale Bitcoin Trust’s $19.65 billion, the report said, citing data compiled by Bloomberg.
Reuters could not independently verify those numbers. The Grayscale product website cites its assets under management at $19.75 billion. A spokesperson could not be reached for comment.
When the nine new ETFs launched in January, Grayscale’s fund had about $29 billion in assets.
Market analysts have been keeping a close eye on the relative flows into the BlackRock ETF and out of the Grayscale Bitcoin Trust since U.S. regulators approved the launch of nine new ETFs and the listed trust’s conversion to Grayscale stock in an exchange-traded product on January 10. .
The Securities and Exchange Commission, led by cryptocurrency skeptic Gary Gensler, had rejected spot bitcoin ETFs for more than a decade due to fears of market manipulation, but approved them in January after Grayscale Investments won an appeal in court last year.
It proved to be a short-lived victory for Grayscale, which has been hit by steady outflows since its newly converted ETF began trading on Jan. 11.
BlackRock’s growing dominance in the new ultra-competitive bitcoin spot landscape is “a reminder that being the first mover doesn’t necessarily mean someone ends up being the biggest winner,” said Aniket Ullal, head of ETF data and analytics at CFRA . Early incumbents may have inherited disadvantages, she noted.
Since its inception, Grayscale has battled obstacles ranging from selling pressure and a 1.5% commission, considerably higher than the average of around 0.25% charged by its new rivals, which also include firms like Fidelity Investments and ARK Investments.
Meanwhile, CFRA’s Ullal noted that BlackRock has benefited from its strong distribution network among independent financial advisors and asset managers.
“We are seeing significant assets shift into ETFs from the wealthy community” as well as individual advisors, Jay Jacobs, U.S. head of thematic and active ETFs, told Reuters on Tuesday ahead of the Bloomberg report.
“Many early movers have moved from direct ownership of digital assets to IBIT,” Jacobs added. “Some of these accounts had millions of dollars” invested in the cryptocurrency.
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While some hedge funds have reported large positions in the new ETFs since the end of the first quarter, other institutional investors have been slower to embrace the new bitcoin ETFs.
“We know this is going to be the longest process,” Jacobs said of institutional buyers. “In some cases, it could take years.”
(Reporting by Suzanne McGee, additional reporting by Jaiveer Singh Shekhawat in Bangalore; Editing by Vijay Kishore and Chizu Nomiyama)