Tight Race in US Bitcoin ETF Market

The competition for dominance in the U.S. Bitcoin exchange-traded fund (ETF) market is intensifying, with the leading funds jostling for the top position. Grayscale Bitcoin Trust (GBTC) currently holds the crown with $18.7 billion in assets under management (AUM), equivalent to about 297,000 Bitcoin. Despite this, GBTC is facing significant pressure from BlackRock’s iShares Bitcoin Trust (IBIT), which now boasts $17.2 billion AUM, narrowing the gap to just $1.5 billion.

This burgeoning rivalry is particularly notable as the third-placed fund lags significantly behind, trailing by more than $7.5 billion from IBIT. The race tightened further following a prediction by Bloomberg senior ETF analyst Eric Balchunas, who anticipated that IBIT might surpass GBTC by the end of April. Although this forecast now seems optimistic, it was not far from possible reality.

IBIT’s recent performance has shown a slight deceleration, with four consecutive days of slowed inflows, which could explain why Balchunas’ prediction may not materialize as expected. Before this slowdown, however, the fund experienced a remarkable 71 consecutive days of inflows, nearing a record-setting streak for ETFs.

In stark contrast, Grayscale’s GBTC has faced consistent challenges, marked by sustained net outflows since its inception. Its most significant single-day loss occurred on March 19, with an outflow of $618.2 million. Even IBIT’s record inflow of $856.53 million on March 12 would still fall short of overtaking GBTC by $25 million based on those figures alone.

Recent weeks have not seen such dramatic flows in either fund. Since mid-April, IBIT’s daily inflows have exceeded $30 million only once, indicating a cooling off from the previously hot pace of capital influx.

Despite the reduced inflow rates, the gap between IBIT and GBTC has nearly halved from $2.3 billion to $1.5 billion within just two weeks since Balchunas made his prediction. This suggests that while the pace may have slowed, the race is far from over.

The narrowing gap in AUM between GBTC and IBIT highlights a dynamic and competitive landscape in the U.S. Bitcoin ETF market. Investors and market watchers will likely keep a close eye on these developments, as shifts in investor sentiment and market dynamics could further alter the standings in this closely watched financial race.