BlackRock's IBIT ETF Cuts Grayscale's GBTC Lead to $2.3 Billion

BlackRock’s IBIT ETF Cuts Grayscale’s GBTC Lead to $2.3 Billion

Bloomberg Intelligence analyst is projecting BlackRock’s spot Bitcoin ETF (IBIT) to flip Grayscale’s lead post the halving. The ETF analyst Eric Balchunas indicated on X (formerly Twitter) that GBTC leadership hangs on a slim $2.3 billion lead. 

The Bloomberg analyst considers that iShares Bitcoin Trust (IBIT) by Larry Fink-led BlackRock is on track to flip Grayscale’s GBTC. The analyst projects that BlackRock’s IBIT could close the gap by the end of April. 

BlackRock’s IBIT Edges Closer to GBTC

Balchunas noted that massive bleeding has cut its lead to $2.3 billion. The analyst considers that a monster rally could delay the flip, though it is likely before the month lapses. 

Balchunas observes that the GBTC had a $4 billion lead ahead of BlackRock’s IBIT. The IBIT march to the top aligns with the framing as the usurper destined to unseat Grayscale’s leadership since the spot Bitcoin ETF approval. 

Grayscale’s GBTC started trading back in 2013, although it is available to accredited and institutional-based investors. GBTC would realize over $43 billion in assets under management (AUM) by November 2021. However, the GBTC’s AUM would plunge below $10 billion as turmoil hit the crypto markets. 

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The race to the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) saw the fund’s AUM surpass $28 billion by January. The Bitcoin ETF approval saw the AUM dip to $19.5 billion as investors ditched it for rival ETFs guaranteeing lower fees.

Grayscale Investments chief executive Michael Sonnenshein attributed the decline to selling prompted by FTX bankruptcy that turned contagious and took down other crypto firms. The executive profiled GBTC as the collateral entangled in some bankruptcy estates that dominated the crypto ecosystem, though admitted the GBTC navigated the phase.  

GBTC Bleeding Erodes Asset Under Management (AUM) 

Analysts have previously indicated that the Grayscale’s AUM declines as the Bitcoin prices dip. The analysts acknowledge that Bitcoin rallied 35% since ETF approval by SEC on January 11 after navigating the cooling off. 

Balchunas observes the cool-off witnessed after Bitcoin rallied to its all-time high in early March. However, the Bitcoin ETFs have recently suffered consecutive bleeding. 

The analyst observes that shares with nearly $58M market value were redeemed on Tuesday, as per CoinGlass. The analyst notes that the 3-day outflow since Friday hit $149 million by Tuesday. 

The outflow coincides with the countdown to the upcoming halving, which is playing out with a plunge in Bitcoin prices. The analysts project the halving event to stimulate price movement across the crypto ecosystem.  

The reduction in rewards for blocks completed from the present 6.25 to 3.125 is set to prompt liquidations unless Bitcoin garners an uptrend stream. Such a rally will see the GBTC hold the lead longer till the end of the month.  

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