In an impressive stroke of financial prowess, American investment juggernaut BlackRock has secured a prominent place in the annals of investment history. The multinational company recently rang up a remarkable $20 billion in total assets, propelling its Spot Bitcoin ETF into the pole position and making it the world’s largest Bitcoin fund, surpassing its erstwhile heavyweight contender, Grayscale.
BlackRock’s iShares Bitcoin Trust has achieved a feat few could replicate. On Tuesday, May 28, the BlackRock’s asset held a jaw-dropping $19.68 billion in Assets Under Management (AUM), a figure that edged out Grayscale’s Bitcoin ETF’s commendable $19.65 billion and outrageously outshone the $11.1 billion held by the third-largest, Fidelity Investments. With barely two days in, BlackRock’s AUM has already soared past the $20 billion mark.
Since initiating its Spot Bitcoin ETF on January 11, Grayscale had been an indomitable force in the Bitcoin fund scene, pulling in staggering outflows worth billions of dollars. One of the most commendable peaks was achieved in 2021 when the asset management company recorded around $44 billion, the highest figure in that period.
The picture, however, started changing color at the start of 2024 when a substantial amount, pegged at around $18 billion, was pulled out from Grayscale’s Bitcoin fund. This significant withdrawal caused a small quake in its financial structure, the echoes of which were felt on May 3, where it marked its first inflow. The $63 million they received put a brief halt to a staggering 82-day streak of outflows.
BlackRock’s Spot Bitcoin ETF has been laden with financial blessings since its inception, recording millions of inflows. With only a few outflows and almost zero zero flows, it has proven to be a steady financial drive. Its highest inflow peak came into play on March 12, when BlackRock raked in about $849 million in a single day.
However, one of its notable withdrawals transpired on May 1, as it lost approximately $36.9 million, a figure that paled significantly when compared to the outflows of more than $167 million reported by Grayscale that same day.
Asset fee management appears to be another defining point of divergence between BlackRock and Grayscale. BlackRock’s Spot Bitcoin ETF has been favored by investors due to its seemingly affordable ETF management fees, having decreased from 0.30% to 0.25%. In stark contrast, Grayscale hosts the highest ETF management fees of all 11 approved United States Spot Bitcoin ETFs, with fees standing as high as 1.5% annually.
As investors continue to flock BlackRock’s way, the company still leads in Spot Bitcoin ETF net inflows according to data from Farside. While all United States Spot Bitcoin ETFs saw zero flows on May 27, BlackRock had already chalked up a total of $127.1 million over the first two days.
BlackRock’s Bitcoin Trust received an impressive $102.5 million in inflows on Wednesday, while Grayscale’s Spot Bitcoin ETF experienced outflows of $105.2 million. Grayscale is still in the red, having lost $31.1 million as of this writing.
In an effort to salvage the situation, Grayscale has pledged to reduce its fees but the current ETF management fees still remain a hindrance. As the financial drama unfolds, it remains fascinating to watch how these financial champions navigate the turbulent world of Bitcoin fund management.
