Despite experiencing its second-lowest daily inflows recently, BlackRock‘s iShares Bitcoin Trust (IBIT) is on the verge of surpassing Grayscale‘s Bitcoin Trust (GBTC) as the largest spot Bitcoin ETF by holdings.
As of April 17, IBIT recorded inflows of $24.9 million, only higher than its lowest inflow of $20.4 million on April 9, according to Dune data. This growth positions IBIT’s market share tantalizingly close to that of GBTC.
Market Share Comparison and Financial Implications
Currently, GBTC holds the largest market share with 36.8%, translating to $19 billion in Bitcoin holdings. IBIT trails slightly with a 32.6% share, holding $16.8 billion worth of Bitcoin, which is $2.2 billion less than GBTC.
This competition underscores a significant shift in investor preference and market dynamics within the ETF landscape.
Impact of ETF Inflows on Bitcoin Pricing
There has been a noticeable slowdown in cumulative ETF inflows since March, with last week recording $199 million worth of net inflows, a steep decline from $2.58 billion in the week beginning March 11.
This reduction in inflows has coincided with a subdued performance in the Bitcoin market, which saw a 10.7% drop last week, lowering its price to $62,971 as of midday UTC, according to CoinMarketCap.
Grayscale’s Struggle with Outflows and Fees
Amid these developments, Grayscale’s GBTC has faced substantial challenges, marked by significant sell-offs and massive outflows, exacerbated by its high trading fee of 1.5%.
This fee is notably higher compared to BlackRock’s IBIT, which charges only 0.25%, and Franklin Templeton’s ETF, which has a fee of 0.19%.
These differences in fees may be influencing investor decisions, potentially contributing to the shifts in market share between these major funds.
