BlackRock's Bitcoin ETF Surges to Second-Largest, Attracting Billions in Investments
BlackRock, the world's largest asset manager, has been supporting Bitcoin since 2016. Their Bitcoin ETF, launched in January 2023, has quickly become the second-largest, attracting significant investments from prominent institutions and individuals.
BlackRock's journey into Bitcoin began six years ago and has evolved with the asset class. The BlackRock Bitcoin ETF ($IBIT) has seen net inflows of over $13 billion since its launch, reaching a fund volume of over $10 billion faster than any other newly launched ETF. It currently holds around 250,000 Bitcoin, valued at approximately $16 billion.
The ETF, which tracks the price of Bitcoin, primarily targets yield-seeking and risk-averse investors. These investors want Bitcoin exposure with reduced volatility and income generation. However, the largest positions are currently held by prominent institutional investors such as hedge funds (e.g., Brevan Howard, Millennium Management) and Harvard University’s endowment. These institutions already have significant market engagement through other investment opportunities.
Robert Mitchnick, head of BlackRock's digital assets department, spoke at the Bitcoin Investor Day in New York. He discussed BlackRock's expectations for Bitcoin's role on Wall Street in the next decade, predicting a convergence of traditional finance and new technology.
The BlackRock Bitcoin ETF ($IBIT) is the second-largest, with a difference of around 100,000 Bitcoin compared to the largest, Grayscale's ($GBTC). Despite some crypto enthusiasts' expectations, BlackRock does not plan to launch exchange-traded funds for many more digital assets. Their clients are primarily interested in Bitcoin, with less interest in other cryptocurrencies.
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