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BlackRock’s Bitcoin ETF Surpasses Grayscale’s GBTC to Become the Largest Spot Bitcoin Product

BlackRock’s iShares Bitcoin Trust has emerged as the world’s foremost Bitcoin fund, amassing nearly $20 billion in assets since its U.S. debut earlier this year.

Data from HODL15Capital reveals that as of Tuesday, the exchange-traded fund boasted $19.68 billion in Bitcoin holdings, surpassing the $19.65 billion held by the Grayscale Bitcoin Trust.

Fidelity Investments holds the third-largest position with an offering totaling $11.1 billion.

The launch of BlackRock’s Bitcoin ETF, alongside Fidelity’s, was part of a cohort of nine funds introduced on January 11, coinciding with Grayscale’s transition into an ETF.

The approval of spot Bitcoin ETFs signifies a significant milestone for the crypto sector, enhancing Bitcoin’s accessibility for investors and igniting a rally that propelled the token to a record high of $73,798 by March.

BlackRock’s ETF Continues to See Highest Inflow

Since its inception, the iShares Bitcoin Trust has attracted the most substantial inflows, totaling $16.5 billion, while investors have withdrawn $17.7 billion from the Grayscale fund during the same period.

Potential factors contributing to the outflows from Grayscale include higher fees and departures by arbitragers.

Notably, Grayscale has expressed its intent to launch a replica of its primary fund, which is anticipated to feature lower fees, as per a March regulatory filing.

The Securities and Exchange Commission (SEC) granted approval for the first US spot-Bitcoin ETFs in January, following a court reversal in 2023 in a case instigated by Grayscale.

Originally established in 2013 by Grayscale, the Grayscale Bitcoin Trust gained widespread recognition as the largest vehicle of its kind.

However, trading of shares in the closed-ended product often diverged significantly from its net asset value, prompting Grayscale’s endeavor to convert it into an ETF to ensure trading parity.

Bitcoin ETFs Among Most Successful Funds in History

The collective of Bitcoin funds, amassing a total of $58.5 billion in assets to date, has been lauded as one of the most successful new categories of ETFs.

Nevertheless, critics contend that the volatility of digital assets may not be conducive to widespread adoption, even within the framework of ETFs.

Some nations, including Singapore and China, have imposed restrictions or outright bans on investor access to cryptocurrencies.

Vanguard Group, the world’s second-largest asset manager, affirmed in January that it has no intentions of offering any crypto-related products.

Bitcoin’s value has quadrupled since the onset of last year, buoyed in part by the introduction of ETFs, signaling a robust recovery from the profound bear market witnessed in 2022.

Last week, the SEC also indicated its openness to permitting ETFs for Ether, the second-largest cryptocurrency by market value.

On May 23, the SEC officially greenlit 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise for the issuance of spot Ether ETFs.

Notably, several ETF issuers omitted staking from their final amendments.

According to analysis firm Kaiko, Grayscale’s forthcoming spot Ethereum ETF may encounter notable outflows, potentially averaging around $110 million per day.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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