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- Bitcoin ETFs are reshaping the commodity ETF landscape, with BlackRock’s IBIT surpassing traditional silver trusts in total AUM.
- BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC), the Bitcoin ETF market have seen 79% of total inflows.
Bitcoin-based exchange-traded funds (ETFs) are rapidly ascending in the commodity ETF space while displacing traditional commodities like silver and positioning themselves as contenders against gold trusts.
In a significant development, BlackRock’s iShares Bitcoin ETF has surpassed the largest silver trust in assets under management (AuM), marking a notable milestone for cryptocurrency within the commodity ETF landscape.
Recent data from HODL15Capital underscores the remarkable progress of Bitcoin spot ETFs in the market, with BlackRock’s iShares Bitcoin ETF now boasting an impressive AuM of $10.03 billion. Also, as per the Crypto News Flash report, the daily trading volumes for BTC ETFs are going crazy every single day.
Bitcoin ETFs are moving up the Commodity ETFs leaderboard.
Note the YTD performance difference of $IBIT $FBTC $ARKB $BITB vs. $GLD $IAU $SLV $GLDM $PDBC $SGOL $DBC $USO $UNG pic.twitter.com/fg3vl4AJTj
— HODL15Capital 🇺🇸 (@HODL15Capital) March 3, 2024
This achievement highlights the growing institutional acceptance of Bitcoin as a viable asset class for investment. The ETF’s year-to-date performance, with a notable 35.2% gain, reflects increasing investor confidence in Bitcoin’s potential for long-term growth.
The rise of Bitcoin ETFs has led to a reordering of the commodity ETF hierarchy, with traditional silver trusts giving way to their digital equivalents. Notably, the iShares Silver Trust (SLV) has slipped in rankings, now holding an AuM of $9.626 billion, reflecting a 4.8% decline year-to-date (YTD).
Following closely behind BlackRock’s iShares BTC ETF is Fidelity’s WiseOrigin Bitcoin ETF, which boasts an AuM of $6.55 billion. With a YTD gain matching that of BlackRock’s ETF at 35.2%, Fidelity’s offering solidifies the position of Bitcoin ETFs as robust contenders within the commodity ETF domain.
BlackRock and Fidelity Dominate Bitcoin ETF Market Share
BlackRock Inc.’s iShares Bitcoin Trust (IBIT) and Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC) have garnered 79% of total inflows among the “Newborn Nine” Bitcoin funds. Responding to this dominance, four of the remaining seven funds have reduced their fees below those of the top two, as per Bloomberg’s analysis of data from the funds’ websites. As reported by Crypto News Flash, BlackRock is planning to bring its IBIT fund to global markets like Brazil.
Valkyrie Investments notably slashed its fee to 0.25% from 0.49%, while Franklin Templeton now offers a sector-low 0.19% after cutting its initial management charge by 10 basis points. Only Bitwise has maintained its fee structure. As per the Crypto News Flash report, Bitwise expects an even greater wave in BTC ETF going ahead.
Bitcoin has witnessed a remarkable surge this year, surpassing $63,000 as retail investors, mindful of potential gains, eagerly embraced the newly introduced ETFs. Bryan Armour, director of passive strategies research at Morningstar Inc. said:
“I expect further concentration among the top ETFs. But others won’t go down without a fight. Fee wars should continue, which will keep pressure on the leaders to maintain their advantage.”
Grayscale Investment has adopted a distinct strategy following the conversion of its Bitcoin trust into an ETF, opting to retain a management fee higher than its competitors. Since the launch, its fund (GBTC) has witnessed outflows exceeding $8 billion.
However, the pace of selling has moderated, with daily outflows decreasing to an average of $138 million in February from January’s $403 million. Despite this, Grayscale remains the largest fund, managing $26 billion in assets compared to BlackRock’s $10 billion.