NEW YORK, January 19, 2024 – BlackRock Inc.’s Bitcoin exchange-traded fund (ETF), known as IBIT, has recently achieved a major milestone by surpassing $1 billion in investor inflows. This notable accomplishment makes IBIT the first of the newly launched Bitcoin ETFs to reach this threshold since they began trading just last week. The rapid accumulation of assets highlights BlackRock's dominance in the emerging Bitcoin ETF market.
The inflows into IBIT were particularly remarkable on Wednesday, when investors contributed an additional $371 million to the fund. This surge underscores the strong interest and confidence in BlackRock’s offering. Alongside Fidelity Investments, which has also played a crucial role in this early consolidation phase, BlackRock has attracted a significant portion of the market. Together, BlackRock and Fidelity have captured 68% of the total inflows across the nine newly launched Bitcoin ETFs, which have collectively amassed nearly $2 billion in assets.
Fidelity's Bitcoin ETF, FBTC, has also demonstrated impressive performance. On its highest inflow day since its launch, FBTC received $358 million, bringing its total to approximately $880 million. This strong showing reflects a broader trend of investor preference shifting towards these newly approved ETFs. Notably, a significant portion of the capital flowing into BlackRock’s and Fidelity’s ETFs appears to be coming from investors redirecting their investments away from Grayscale Investment’s GBTC fund. This shift follows the U.S. Securities and Exchange Commission’s (SEC) recent approval of these ETFs, marking a transformative development for Bitcoin and the wider cryptocurrency landscape.
The SEC’s approval of 11 Bitcoin ETF applications from prominent firms such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck has expanded investment access to Bitcoin, making it easier for investors to gain exposure to the cryptocurrency through regulated financial products. These ETFs offer a more streamlined and regulated avenue for investment compared to purchasing Bitcoin directly.
A key factor contributing to the popularity of BlackRock’s and Fidelity’s ETFs is their competitive management fees, which are significantly lower than the 1.5% fee charged by GBTC. For example, Franklin Templeton’s Bitcoin ETF, despite offering the lowest management fee in this new cohort at 0.19%, has attracted less than 2% of the total inflows among the Bitcoin ETFs. This disparity highlights how management fees can influence investor choices, with lower-cost options appealing to those seeking to minimize their investment expenses while gaining exposure to Bitcoin.