Original author: Grapefruit, ChainCatcher
Original editor: Marco, ChainCatcher
On May 29, BlackRock's iShares Bitcoin Spot ETF IBIT's asset size exceeded Grayscale's GBTC, becoming the world's largest Bitcoin spot ETF in terms of BTC holdings.
According to data from HOD L1 5 Capital, on May 28, BlackRock's Bitcoin spot ETF IBIT received inflows of approximately US$102 million (1,503 BTC), and the number of BTC held has exceeded 288,670, equivalent to approximately US$19.795 billion.
On the same day, funds managed by Grayscale's GBTC saw an outflow of more than US$105 million (approximately 1,543 BTC), the largest day of capital outflow in the past two weeks. GBTC holds approximately 287,450 BTC, worth US$19.758 billion.
The scale of BTC managed by IBIT Asset Management has officially surpassed GBTC, and is more than US$30 million ahead of GBTC, becoming the world's largest Bitcoin spot ETF with the largest BTC holdings.
IBIT has attracted about $20 billion in funding in 4 months since its launch
According to data from BlackRock's official website, as of May 30, IBIT's average daily trading volume in the past 30 days was US$24.72 million.
Since it went online for trading on January 11, in just four months, IBIT has successfully attracted approximately $20 billion worth of BTC, making it one of the fastest growing ETFs in history.
Regarding IBIT's excellent performance in a short period of time, Bloomberg ETF analyst Eric Balchunas wrote that IBIT is a legend. In history, only one ETF has reached an asset size of US$20 billion in less than 1,000 days. JEPI did it in 985 days, while IBIT achieved the same scale in only about 137 days.
According to SoSoValue data, IBIT has seen positive capital inflows for more than three consecutive months since it went online on January 11 until mid-April.
Among them, the funds flowing in on the first day of launch exceeded 110 million US dollars, when the BTC price was 46,000 US dollars; the amount of funds flowing in on March 12 reached the highest level, about 848 million US dollars, and on the next day (March 13), the BTC price hit a historical high of 73,700 US dollars.
Regarding the growth of IBIT funds, Eric Balchunas said that IBIT has low fees, high liquidity and the strong brand influence of BlackRock iShares.
In addition, he added that although the total number of transactions on IBIT has decreased recently, the average transaction size has increased, which means that large investors have replaced retail "small fish".
Behind the outflow of GBTC funds: high fees, premium or discount risks
GBTC and IBIT are both Bitcoin spot ETFs. Why do their performances differ so drastically? During the same period, GBTC has been experiencing capital outflows, while IBIT has been experiencing capital inflows?
According to the HOD L1 5 Capital data statistics, since IBIT went online, GBTC has been in a state of capital outflow almost every week, which has given IBIT the opportunity to quickly surpass it.
GBTC, owned by Grayscale, has existed since 2013 and is the earliest compliant product for the general public to participate in BTC investment. Before the launch of the Bitcoin spot ETF, it managed approximately 619,000 BTC.
"Grayscale GBTC increases or reduces BTC holdings" was once considered by the crypto community to be an important indicator of BTC price.
Why has GBTC's asset management scale been shrinking after the launch of Bitcoin spot ETFs such as BlackRock's IBIT and Fidelity's FBTC? This is mainly because GBTC and Bitcoin spot ETF products operate differently.
GBTC is a Bitcoin trust fund, which means that investors give their money to Grayscale, which purchases and holds cryptocurrencies on behalf of investors, and then issues shares to investors, representing their shares in the trust fund. Investors can only buy shares in the secondary market, and redemption is not supported.
GBTC's share price is related to the number and market value of Bitcoin it holds, but it often trades at a high premium or discount. A premium means that GBTC's share price is higher than the value of Bitcoin per share it holds, and a discount means that GBTC's share price is lower than the value of Bitcoin per share it holds.
A Bitcoin spot ETF is an ETF that directly holds Bitcoin. Its price is consistent with the Bitcoin market price, without any premium or discount.
In January this year, GBTC was approved by the SEC to be converted into a Bitcoin spot ETF, while supporting investors to freely redeem their fund shares through authorized dealers (APs) and convert their ETF shares into US dollar cash. This means that GBTC holders cannot cash out their gains before the product is converted into an ETF.
There are two main reasons behind the outflow of GBTC funds:
First, GBTC’s fund management fee is too high, which is 5-6 times that of similar competitors. GBTC’s management fee is about 1.5%, while the fee rate of Bitcoin spot ETF is only about 0.2% or lower;
Second, it can avoid the risk of premium or discount of GBTC, because the non-redeemable mechanism of GBTC causes the difference between its fund price and the market value of Bitcoin to be large, while the difference between the price of Bitcoin spot ETF and the market price of Bitcoin is small.
According to SoSoValue data, since the launch of the Bitcoin ETF, GBTC has been in a state of net outflow for four consecutive months, and the outflow rate has slowed down since May.
As of May 30, GBTC's assets under management were worth $19.28 billion. In the past four months, a total of 332,000 BTC had flowed out, and it still held about 287,000 BTC.
IBIT has become a new driver of BTC price trends
Today, IBIT's fund management scale has surpassed GBTC by approximately US$200 million, and will become a new driving force behind the price trend of Bitcoin.
Market maker Wintermute said: “This represents a major shift in the supply and demand pattern of BTC. Now investors will no longer pay attention to GBTC, but instead focus on the inflow and outflow of funds in IBIT, which may drive users to pay attention to Bitcoin ETFs or the BTC behind them.”
As of May 30, the total net asset value of Bitcoin spot ETFs was US$57.683 billion, and IBIT accounted for more than 33.7% of the market share.
Among them, there are three Bitcoin ETFs with a scale of tens of billions of dollars, including IBIT (US$19.48 billion), GBTC (US$19.28 billion), and FBTC (US$10.94 billion).
Bitcoin spot ETFs represented by IBIT are becoming the entry point for traditional capital to enter the crypto field. Compared with the last round of institutional bull market brought by Grayscale, the world's largest asset management companies such as BlackRock have brought in larger amounts of funds this time.
