BlackRock Bitcoin ETF AUM reaches $2 billion for first time

Author: Lou Zhe; Source: FX168

Saturday (January 27), BlackRock The iShares Bitcoin ETF (IBIT) becomes the first recently launched spot Bitcoin product to reach $2 billion in assets under management (AUM). That doesn't include Grayscale's GBTC, which had nearly $30 billion in assets under management when it switched from closed-end funds to spot ETFs.

On Thursday, investors added about $170 million to IBIT, and the fund purchased nearly 4,300 more Bitcoins (BTC), increasing its holdings of the tokens The total number reached 49,952. As the price of Bitcoin rose to levels well above $40,000 early Friday, assets under management (AUM) have surpassed $2 billion.

ETF Store President Nate Geraci said that the fund's current asset management scale exceeds US$2 billion. Among the more than 600 ETFs launched last year, in terms of asset collection, Ranked third, he believes that IBIT will soon take over the top spot.

The next fund to cross the $2 billion mark is likely to be Fidelity’s Wise Origin Bitcoin Fund (FBTC), which as of January 25 held of Bitcoins is just under 44,000.

The early dominance illustrates the strength of the two asset management giants' marketing and distribution channels, which may help integrate products into institutional and retail investment portfolios. Although Bitcoin plummeted after its launch, leading to double-digit losses for both IBIT and FBTC, inflows have continued. Their distribution prowess, coupled with investors' possible dislike of smaller issuers, puts these two companies well ahead in the field.

Roxanna Islam, an analyst at ETF Data and Research Center, said: "BlackRock and Fidelity have liquidity and brand recognition that some other issuers do not have. , especially for retail investors who are hesitant to invest in emerging asset classes."

Analyst firm VettaFi said: "It's still early days in the competition. stage, but I think the gap between BlackRock and Fidelity and other issuers will only widen as issuances and assets increase."

While it’s a crowded space, Nate Geraci said the strong performance shows there’s still plenty of room for growth in the spot Bitcoin ETF space.

Nate Geraci said: "For an ETF in any asset class, reaching $500 million is no small feat, let alone $2 billion in assets under management. To achieve this in a novel asset class less than two weeks after launch is impressive."

To So far, with the exception of Grayscale Bitcoin Trust (GBTC), all spot Bitcoin ETFs that started trading this month have experienced net inflows. While GBTC is by far the world’s largest cryptocurrency fund with $22 billion in assets, it has lost about $4 billion since converting to an ETF.

GBTC's fee is the highest in the industry at 1.5%, which is lower than the 2% fee before conversion, but still higher than its closest competitors. Franklin Templeton’s fund has the lowest expense ratio among spot Bitcoin ETFs at 0.19% after the exemption, while BlackRock and Fidelity are close behind with final fees of 0.25% after the exemption period.

SkyBridge Capital analyst Anthony Scaramucci said that in the long run, companies such as BlackRock and Fidelity are likely to remain in the lead. "BlackRock and Fidelity are going to be the two dominant names. They have the largest sales force. The focus of financial services is assets, and assets are the two largest players in the ETF space. So I think they will be the two A winner."