Original author: Grapefruit, ChainCatcher

Original editor: Marco, ChainCatcher

On May 29, BlackRock's iShares Bitcoin spot ETF IBIT's asset size has exceeded Grayscale's GBTC, becoming the world's largest Bitcoin spot ETF with the largest BTC holdings.

According to HOD L1 5 Capital data, on May 28, BlackRock's Bitcoin spot ETF IBIT received inflows of approximately US$102 million (1,503 BTC), and the number of BTC held has exceeded 288,670, with a value of approximately US$19.795 billion.

On the same day, funds managed by Grayscale's GBTC saw outflows of more than US$105 million (approximately 1,543 BTC), the largest single-day outflow in the past two weeks. GBTC holds approximately 287,450 BTC, valued at US$19.758 billion.

The scale of BTC managed by IBIT’s assets has officially surpassed GBTC, and is more than US$30 million ahead of GBTC, making it the world’s largest Bitcoin spot ETF with the largest BTC holdings.

4 months after launch, IBIT attracted about 20 billion US dollars

According to data from BlackRock's official website, as of May 30, IBIT's average daily trading volume in the past 30 days was US$24.72 million.

Since its launch on January 11, just four months later, IBIT has successfully attracted approximately US$20 billion worth of BTC, making it one of the fastest growing ETFs in history.

Regarding IBIT's excellent performance in a short period of time, Bloomberg ETF analyst Eric Balchunas wrote that IBIT is a legend. In history, only one ETF has reached an asset size of US$20 billion in less than 1,000 days. JEPI did it in 985 days, while IBIT achieved the same scale in only about 137 days.

According to SoSoValue data, IBIT saw positive capital inflows for more than three consecutive months from January 11th when it went online until mid-April.

Among them, the inflow of funds on the first day of listing exceeded 110 million US dollars, when the BTC price was 46,000 US dollars; on March 12, the amount of funds flowing in reached the highest level, about 848 million US dollars, and on the next day (March 13), the BTC price hit a historical high of 73,700 US dollars.

Regarding the growth of IBIT funds, Eric Balchunas stated that IBIT has low fees, high liquidity and the strong brand influence of BlackRock iShares.

In addition, he added that although the total number of IBIT transactions has decreased recently, the average transaction size has increased, which means that large investors have replaced retail "small fish".

Behind the outflow of GBTC funds: high fees, premium or discount risks

GBTC and IBIT are both Bitcoin spot ETFs, so why do their performances differ so much? During the same period, GBTC has been experiencing capital outflows, while IBIT has been experiencing capital inflows.

According to the HOD L1 5 Capital statistics, since IBIT went online, GBTC has been experiencing capital outflows almost every week, which has given IBIT the opportunity to quickly surpass it.

Grayscale's GBTC has existed since 2013 and is the earliest compliant product for the general public to participate in BTC investment. Before the launch of the Bitcoin spot ETF, it managed approximately 619,000 BTC.

"Grayscale GBTC increases or reduces BTC holdings" was once considered by the crypto community to be an important indicator of BTC price.

Why has GBTC's asset management scale been shrinking after the launch of Bitcoin spot ETFs such as BlackRock's IBIT and Fidelity's FBTC? This is mainly because GBTC and Bitcoin spot ETF products operate differently.

GBTC is a Bitcoin trust fund, which means that investors give their money to Grayscale, which purchases and holds cryptocurrencies on behalf of investors, and then issues shares to investors to represent their shares in the trust fund. Investors can only buy shares in the secondary market, and redemption is not supported.

GBTC's share price is related to the number and market value of Bitcoin it holds, but it often trades at a high premium or discount. A premium means that GBTC's share price is higher than the value of Bitcoin per share it holds, and a discount means that GBTC's share price is lower than the value of Bitcoin per share it holds.

Bitcoin spot ETF is an ETF that directly holds Bitcoin. Its price is consistent with the Bitcoin market price, and there is no premium or discount.

In January this year, GBTC was approved by the SEC to be converted into a Bitcoin spot ETF, while supporting investors to freely redeem their fund shares through authorized dealers (APs) and convert their ETF shares into US dollar cash. This means that GBTC holders cannot cash out their gains before the product is converted into an ETF.

There are two main reasons behind the outflow of GBTC funds:

First, GBTC’s fund management fee is too high, which is 5-6 times that of similar competitors. GBTC’s management fee is about 1.5%, while the fee rate of Bitcoin spot ETF is only about 0.2% or lower;

Second, it can avoid the risk of premium or discount of GBTC, because the non-redeemable mechanism of GBTC may lead to a large difference between its fund price and the market value of Bitcoin, while the difference between the price of Bitcoin spot ETF and the market price of Bitcoin is very small.

According to SoSoValue data, since the launch of the Bitcoin ETF, GBTC has been in a state of net outflow for 4 consecutive months, and the outflow rate has slowed down since May.

As of May 30, the value of GBTC's assets under management was US$19.28 billion. In the past four months, a total of 332,000 BTC have flowed out, and it still holds about 287,000 BTC.

IBIT has become a new driver affecting BTC price trends

Today, IBIT’s fund management scale has surpassed GBTC by approximately US$200 million, and will become a new driving force behind the price trend of Bitcoin.

Market maker Wintermute said: "This represents a major shift in the supply and demand pattern of BTC. Now investors will no longer focus on GBTC, but on the inflow and outflow of funds from IBIT, which may drive users to pay attention to Bitcoin ETFs or the BTC behind them."

As of May 30, the total net asset value of Bitcoin spot ETF was US$57.683 billion, and IBIT accounted for more than 33.7% of the market share.

Among them, there are three Bitcoin ETFs with a scale of tens of billions of dollars, including IBIT (US$19.48 billion), GBTC (US$19.28 billion), and FBTC (US$10.94 billion).

Bitcoin spot ETFs represented by IBIT are becoming the entry point for traditional capital to enter the crypto field. Compared with the last round of institutional bull market brought by Grayscale, the world's largest asset management companies such as BlackRock are bringing in larger amounts of funds this time.