IBIT, which has attracted approximately 20 billion USD in the four months since its launch, has become a new driving force affecting the price trend of BTC?

Original author: Pomelo, ChainCatcher

Original text: Marco，ChainCatcher

Translation: Marco, ChainCatcher

On May 29, BlackRock's iShares Bitcoin Spot ETF IBIT assets have exceeded GBTC under Grayscale, becoming the largest Bitcoin Spot ETF in the world in terms of BTC holdings.

According to data from HODL1 5 Capital, on May 28th, BlackRock's Bitcoin Spot ETF IBIT received an inflow of approximately $102 million (1503 BTC), and the number of BTC held has exceeded 288,670, with a value of approximately $19.795 billion.

On the same day, the funds managed by GBTC under Grayscale Investment flowed out more than 105 million US dollars (approximately 1543 BTC), making it the largest outflow in the past two weeks. GBTC currently holds approximately 287,450 BTC, with a value of 19.758 billion US dollars.

IBIT's BTC assets under management have officially surpassed GBTC and are more than $30 million ahead of GBTC, making it the world's largest Bitcoin spot ETF in terms of BTC holdings.

After 4 months of launch, IBIT has attracted approximately 20 billion US dollars.

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

Since the text is in Chinese Simplified, I will translate it to English.

Translated text: "Since its launch on January 11th, in just 4 months, IBIT has successfully attracted approximately 20 billion USD worth of BTC, making it one of the fastest-growing ETFs in history."

Regarding the outstanding performance of IBIT in a short period of time, Bloomberg ETF analyst Eric Balchunas wrote that IBIT can be described as a legend. In history, only one ETF has reached a $20 billion asset scale in less than 1000 days, JEPI took 985 days to achieve this, while IBIT achieved the same scale in just about 137 days.

According to the SoSoValue data, IBIT has seen continuous positive inflows of funds from the time it went online on January 11th until mid-April, totaling more than 3 months.

On the first day of listing, the inflow of funds exceeded $110 million, with BTC price at $46,000. On March 12th, the highest amount of funds flowed in, reaching approximately $848 million. The next day (March 13th), BTC price reached a historical high of $73,700.

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

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

The capital outflow behind GBTC: expensive fees, premium or discount risks

GBTC and IBIT, as Bitcoin Spot ETFs, have shown opposite performance. During the same period, GBTC has consistently experienced capital outflows, while IBIT has seen capital inflows.

According to the HOD L1 5 Capital data statistics, since IBIT went online, GBTC has been in a state of capital outflow almost every week, which has given IBIT the opportunity to quickly surpass.

Grayscale's GBTC, which has been in existence since 2013, is the earliest compliant product for public participation in BTC investment. Before the launch of the Bitcoin Spot ETF, it managed approximately 619,000 BTC.

"Grayscale GBTC increase or reduce BTC" was once considered an important indicator of BTC price fluctuations in the encryption community.

Why has the asset management scale of GBTC been shrinking all the time after the launch of IBIT by BlackRock and FBTC by Fidelity? This is mainly because GBTC and Bitcoin spot ETF operate differently.

GBTC is a Bitcoin trust fund, which means that investors give money to Grayscale, Grayscale represents investors to purchase and hold cryptocurrencies, and then issue shares to investors, representing their share in the trust fund, and investors can only buy shares in the secondary market, and redemption is not supported.

GBTC's stock price is related to the number of bitcoins it holds and its market value, but it often experiences a high premium or discount. Premium refers to the situation where GBTC's stock price is higher than the value of bitcoins it holds per share, while discount refers to the situation where GBTC's stock price is lower than the value of bitcoins it holds per share.

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

This January, GBTC was approved by the SEC to be convertible into Bitcoin Spot ETF, allowing investors to redeem their fund shares for USD cash through authorized participants (AP). This means that GBTC holders cannot cash out their profits until the product is converted into an ETF.

The outflow of funds in GBTC is mainly due to two reasons:

One reason is that the management fee of GBTC is too high, which is 5-6 times higher than that of its competitors. The management fee of GBTC 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 inability of GBTC's redemption mechanism may lead to a significant 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 data from SoSoValue, since the launch of Bitcoin ETF, GBTC has been in a net outflow state for 4 consecutive months, and the outflow speed has decreased in May.

As of May 30th, the assets under management value held by GBTC is worth $19.28 billion. In the past 4 months, a total of 332,000 BTC have been outflowed, and it still holds approximately 287,000 BTC.

IBIT has become a new driver affecting the trend of BTC price.

Now, IBIT's fund management scale has exceeded approximately 200 million US dollars of GBTC, and it will also become a new driving force behind the trend of Bitcoin prices.

Market maker Wintermute said, "This represents a significant shift in the supply and demand dynamics of BTC. Investors will now shift their focus from GBTC to the inflow and outflow of funds in IBIT, which may drive user attention to Bitcoin ETFs or BTC behind them."

As of May 30th, the net asset value of Bitcoin Spot ETF totaled 57.683 billion US dollars, with IBIT's market share exceeding 33.7%.

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

IBIT, represented by Bitcoin Spot ETF, is becoming the gateway for traditional capital to enter the encryption field. Compared to the institutional bull brought by the previous round of Grayscale, this time, larger amounts of funds are being introduced by global asset management companies such as BlackRock.