BlackRock $20bn ETF Becomes World’s Biggest Bitcoin Fund

BlackRock’s Bitcoin spot exchange-traded fund (ETF) has become the world’s biggest crypto fund, Bloomberg reported, saying the iShares Bitcoin Trust has accumulated nearly $20 billion (£16bn) since its launch alongside several other such funds in January.

The BlackRock fund held $19.68bn in the coin as of Tuesday, Bloomberg reported on Wednesday, compared to $19.65bn for the Grayscale Bitcoin Trust, and followed in third-place by $11.1bn for Fidelity Investment’s Bitcoin ETF.

The BlackRock and Fidelity ETFs premiered on 11 January, along with seven others, the same day that the Grayscale vehicle converted to an ETF, after the US Securities and Exchange Commission (SEC) approved Bitcoin ETFs.

The SEC had barred Bitcoin ETFs for a decade until Grayscale won a court case last year in its effort to convert the Grayscale Bitcoin Trust, launched in 2013, to an ETF.

Investor legitimacy

Since that conversion the Grayscale vehicle has shown steady outflows of capital, which analysts say is due to higher fees and other factors, while BlackRock has benefited from a strong distribution network among independent financial advisers and wealth managers.

When the Grayscale fund converted to an ETF it held $29bn in assets.

The SEC’s move to approve spot ETFs was seen as a major victory for the Bitcoin community and has seen the token reach a new record of more than $73,000 in March. The token is currently trading at around $67,000.

ETFs make Bitcoin more accessible to mainstream investors because they are pegged to the value of the coin but do not require technical measures such as digital wallets required to directly hold the currency.

Jay Jacobs, BlackRock head of thematic and active ETFs, told Reuters the company had seen many investors sell their direct digital asset holdings and invest in the company’s fund.

Crime fears

Many countries, including China and Singapore, continue to limit or ban investor access to cryptocurrencies on concerns that they represent no real investment value, while facilitating illegal activity such as money laundering.

UK-Chinese national Jian Wen, a former takeaway worker, was this month sentenced to more than six years in prison for using Bitcoin to launder allegedly stolen funds, after police seized devices containing more than £3bn in the cryptocurrency from her home.