BlackRock’s Bitcoin ETF is now larger than its Gold ETF

BlackRock’s iShares Bitcoin Trust (IBIT) has overtaken the iShares Gold Trust (IAU), in assets under management (AUM). BlackRock’s IBIT has garnered around $33.1 billion in AUM, overshadowing IAU, which currently holds around $32.9 billion in assets.

BlackRock’s iShares Bitcoin Trust (IBIT) has outranked its Gold ETF in 2024, with assets under management surpassing $33 billion. Yet, Gold ETFs currently hold around $32.9 billion in assets under management. 

BlackRock’s iShares Bitcoin Trust has accumulated $10 BN in just seven weeks — the fastest an ETF has ever hit that milestone and a feat which the first gold ETF took more than two years to accomplish: BBG

— zerohedge (@zerohedge) March 3, 2024

BlackRock’s iShares Bitcoin Trust launched earlier this year, accumulating over $10 billion in assets within its first two months of trading. According to Zerohedge, this milestone took the first gold ETF approximately two years to accomplish.

Data from Farside Investors shows that yesterday IBIT garnered a record $1.1 billion in a single day. It also registered over $27 billion in net inflows since its launch.

Several factors can be attributed to IBIT’s surge in assets, including strong demand from retail and institutional investors. Data also shows that the recent rise in Bitcoin, which hit a new all-time high of over $76,000 yesterday, might have fueled BlackRock’s iShares Bitcoin Trust growth.

Bitcoin ETFs overtakes Gold ETFs with $63 billion in holdings

Spot Bitcoin ETFs gained massive growth as investment vehicles, accumulating 938,000 Bitcoin worth $63.3 billion in the first year of trading. According to data from Coinmarketcap, it represents 4.5% of Bitcoin’s total circulating supply. 

Binance Research reported that the first Gold ETF that went live in 2005 drew in a then-record $1.5 billion in its first year. On the other hand, Bitcoin ETFs have already amassed over $21 billion in inflows in just 10 months of action.

The Bitcoin ETF market has consolidated among three players, BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC, which hold 84% of the total. However, Blackrock’s iShares Bitcoin Trust has amassed the biggest slice of the cake, cementing the company’s leading position in the ETF space.

Hours after the US elections results  were announced, BlackRock’s IBIT experienced its highest daily trading volume since its launch. Yesterday, it garnered an inflow of $1.1 billion in a single day, which surpassed the annual flows of all but the top 150 ETFs in the United States. 

Inflows into Bitcoin ETFs suggest a shift in investor interest from gold

According to a report by Reuters, radical inflows into digital assets might highlight changing investor interest in traditional safe-haven assets like gold. IBIT’s performance highlights a broader trend of increasing acceptance and integration of digital assets within mainstream investment portfolios.

All the same, retail investors, who account for 80% of the money put into Bitcoin ETFs so far, could be the major drivers of this shift. Institutional investors are also gathering pace into Bitcoin ETFs, with over 1,200 on board, including big-name players including Goldman Sachs and Morgan Stanley.

The surge in interest in Bitcoin ETFs could suggest a morph in sentiment as more investors and institutions consider the leading crypto asset as a complement or an alternative to traditional assets like gold.

Inversely, Bitcoin ETFs’ success story might differ for other crypto ETFs like Ethereum spot ETFs, which have failed to gain much traction. According to Coinmarketcap, Ethereum ETFs recorded more than $103 million in outflows since their launch, followed by negative flows in eight of the 11 weeks of trading.