NEW YORK, March 10, 2024 — BlackRock’s Bitcoin Exchange-Traded Fund (ETF) has achieved a historic milestone, surpassing $10 billion in assets faster than any other U.S. ETF in history, fueled by a continued surge in Bitcoin's value.

The iShares Bitcoin Trust (IBIT), launched on January 11, reached the $10 billion mark in less than two months. This rapid growth eclipses the previous record held by Invesco QQQ, which took just over a year to reach a similar milestone, according to Morningstar. As of now, IBIT’s total assets stand at approximately $12.7 billion, a combination of Bitcoin’s appreciation and over $7 billion in net inflows.

The approval of the ten spot Bitcoin ETFs by the Securities and Exchange Commission (SEC) on January 11 has been a significant factor in this growth. The rally in Bitcoin’s price, which surpassed $70,000 on Friday before settling around $68,500 later in the day, has buoyed the ETF market. From mid-January to the end of February, the ten spot Bitcoin ETFs collectively attracted around $7 billion in net inflows. This includes $8.5 billion withdrawn from the $27.5 billion Grayscale Bitcoin Trust ETF (GBTC), according to data from Morningstar Direct. The Fidelity Wise Origin Bitcoin ETF has also seen substantial growth, accumulating approximately $7.6 billion in assets, positioning it as the second-fastest fund to reach the $10 billion milestone.

Many recent investments in Bitcoin ETFs appear to be coming from investors who previously held positions in GBTC and are now shifting to less expensive alternatives. Dave Nadig, a veteran ETF observer, noted that much of the recent trading activity in Bitcoin ETFs has been driven by high-frequency traders seeking to capitalize on minor price fluctuations. However, a significant portion of the new investments in BlackRock’s Bitcoin ETF are attributed to retail investors looking to access cryptocurrency through tax-advantaged retirement and brokerage accounts.

Grayscale’s GBTC, which launched over a decade ago and has a higher management fee of 1.5%, is seeing investors exit in favor of more cost-effective options, some of which offer fee waivers. Zach Pandl, Grayscale’s director of research, acknowledged GBTC’s pioneering role in the industry but also recognized the need to remain competitive in a rapidly evolving market.

The approval of spot Bitcoin ETFs by the SEC has contributed to a favorable market environment, reducing some of the downside risks associated with Bitcoin investments. The net assets in Grayscale’s ETF have nearly rebounded since its conversion, allowing long-term holders to realize gains from Bitcoin’s substantial rise over the past decade.

Recent ETF launches from JPMorgan and State Street Global Advisors have also reached the $10 billion mark in about two years, according to Morningstar. State Street’s SPDR Gold Shares ETF (GLD), which launched in late 2004, similarly achieved the $10 billion milestone relatively quickly, reaching it by early 2007.

James Seyffart, a research analyst with Bloomberg Intelligence, expressed his astonishment at the rapid growth of Bitcoin ETFs. “Demand has accelerated much faster than anticipated,” he said. “Bitcoin has become more secure since the January ETF launches, particularly with the SEC’s approval reducing some of the downside risks.”

Among the Bitcoin ETFs, those from iShares, Fidelity, and Cathie Wood’s Ark Investment Management have attracted the most new capital since their launch. Conversely, ETFs from WisdomTree, Valkyrie, and Franklin Templeton have seen less success in garnering assets. Will Peck, WisdomTree’s head of digital assets, acknowledged that while their $58 million Bitcoin ETF has not reached the scale of its peers, it has still been a relatively successful launch. He attributed the ETF’s performance to Bitcoin’s impressive price surge, which defied earlier expectations of a “buy the rumor, sell the news” scenario.