BlackRock Hits $1B AUM, GBTC Sales Slow Down

The data for the fourth day on which spot Bitcoin ETFs are traded in the US is complete. And the numbers are once again extremely impressive. Bloomberg analyst Eric Balchunas presented the final data for day 4 of the spot Bitcoin ETFs via X, highlighting the strong performance of the newly approved spot Bitcoin ETFs (all 10 approved ETFs minus Grayscale which converted its GBTC Trust into an ETF), collectively termed the “Newborn Nine.”

2 Spot Bitcoin ETFs Among Top-5 Launches By AUM

Balchunas conveyed the burgeoning success of these ETFs, noting, “Day Four was a good one, the ROLLING NET FLOWS grew to +$1.2b after the Newborn Nine pulled in $914b on Wednesday, their best day yet, overwhelming the $450 out of GBTC. The ‘Nine’ have now taken in $3b and traded $5.4b in the first four days (abnormally high numbers).”

This influx of investment has particularly favored BlackRock’s IBIT, which has now amassed over $1 billion ($1.081 billion), with Fidelity’s FBTC ($882.3 million) and Bitwise’s BITB ($373.3 million) trailing behind.

The robust growth of these ETFs, however, does not solely signify a shift of capital from Grayscale’s GBTC. Balchunas elaborated, “Even if every penny of GBTC outflows went to them (it hasn’t), this is normal stuff. ETFs have been taking money from high-cost mutual funds for decades, and it still helped them grow and get mojo which has led to millions of new invs. So get used to it, the ‘Nine’ gonna steal from more than GBTC too. Anything high cost is vulnerable now. This is the way.”

On a specific query about IBIT’s inflow surpassing its trading volume on day 4, Balchunas suggested, “Some large custom creation prob came in,” indicating significant transactions by possibly institutional investors.

The success of these spot BTC ETFs is not just confined to their own sphere. Balchunas pointed out that after four days, two of them are in the top 5 and three in the top 10 of the most successful ETF launches. Only iShares Core S&P 500 ETF (IVV), Invesco Trust Series 1 (QQQ) and Vanguard 500 Index Fund ETF (VOO) have amassed a higher AUM in the first week.

Grayscale Outflows Slow Down

Alex Thorn, Head of Research at Galaxy, confirmed a reduction in the selling pressure of Grayscale’s GBTC. He reported earlier today, “Grayscale transferred 9,839 BTC ($417m) onchain to Coinbase Prime this morning to settle yesterday’s redemptions (T+1 settlement).”

Notably, this is less than the day before when Grayscale moved 18,000 BTC (worth $770 million) to Coinbase Prime to settle Tuesday’s GBTC redemptions. This observation is critical, considering Grayscale’s GBTC has witnessed huge outflows since the regulatory approval, driven by factors such as the elimination of the discount to net asset value and lower fees offered by competing ETFs.

However, it remains to be seen if GBTC sales really keep slowing down in the coming days and weeks. While the inflows to the other spot Bitcoin ETF issuers aka “Newborn Nine” has compensated the selling completely, the BTC price has remained somewhat stagnant, hovering below $43,000 over the past few days.

Meanwhile, crypto analyst James Van Straten provided a stark perspective on the rate at which BlackRock’s IBIT is acquiring Bitcoin compared to Grayscale’s outflow. He remarked, “This is quite wild. At the current run rate, in 37 days, IBIT would have flipped GBTC in terms of Bitcoin holdings. BlackRock would have approximately 256,936.75 BTC, surpassing Grayscale’s projected holdings of around 247,813.95 BTC.”

At press time, BTC traded at $42,030.

Featured image created with DALL·E, chart from TradingView.com