Here’s Why BlackRock’s Bitcoin ETF Buys When Others Are Selling

The BlackRock spot Bitcoin exchange-traded fund is by far the industry leader, buying more and selling less than its competitors.

The BlackRock iShares Bitcoin Trust (IBIT) has seen nearly $65 billion in aggregate inflows since its launch, surpassing the total inflows of all its competitors combined.

The fund often buys when all others are at zero flows or selling, such as on Wednesday, when it purchased 3,510 BTC, while all other funds, aside from Bitwise, bought nothing.

There are a few reasons for this, as explained by Arkham Intelligence.

Firstly, BlackRock’s “brand image and reputation attract flows for Bitcoin,” which has accelerated their flagship crypto ETF to almost $100 billion in assets under management, it stated.

IBIT Bought 18,000 BTC So Far This Week

Secondly, BlackRock’s ETF, the firm’s highest revenue-generating fund, has a significantly lower management fee than the previous market leader, Grayscale’s GBTC. This has lead to a “slow but steady arbitrage of assets flowing out of GBTC and into IBIT.”

Grayscale’s Bitcoin Trust has seen a whopping $24 billion in outflows since spot Bitcoin ETFs launched in the US in January 2024. However, $1.9 billion of this has also gone into its lower-fee Mini Bitcoin Trust.

Finally, it is possible that “BlackRock also reports its ETF flows on a “T+1 basis” relative to other ETFs, said Arkham researchers.

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This means that if there are large flows for Monday, but limited or negative flows on Tuesday, BlackRock may appear to be buying “more” because it may be reporting its Monday flows a day after, on Tuesday.

IBIT has seen a whopping $2.3 billion, or 18,590 BTC, in inflows so far this week, which is more than 90% of the total inflow for all spot BTC ETFs over the same three-day period.

ETF expert Nate Geraci commented on Thursday that six of the top eight ETF issuers still have no spot crypto ETF presence. These include Vanguard, State Street, Schwab, JPMorgan, Dimensional, and First Trust.

“Wild how top issuers basically ceded category to BlackRock. Doesn’t make sense IMO.”

ETF News This Week

Bitwise filed an update to its Solana ETF on Wednesday, which includes staking in the name and provides the fee, at 0.20%, according to Bloomberg analyst James Seyffart.

“Low fees have near perfect record of attracting investors, so good sign for inflow potential,” commented fellow analyst Eric Balchunas.

There was also a new bunch of “stacked” ETFs filed this week, added Seyffart. These will use futures to provide exposure to two assets or strategies, and all but one are Bitcoin, crypto, gold or digital asset treasury related.