Bitcoin ETF: BlackRock Almost Overtaking Grayscale in BTC Holdings 

Key Takeaways

• Grayscale’s Bitcoin holdings are decreasing rapidly with $300m in recent outflows.
• BlackRock is catching up, with its Bitcoin ETF holdings increasing with inflows.
• Since the Bitcoin ETF debut in January, the market experienced at least 11 days of outflows weighed down by Grayscale.

Grayscale and BlackRock are two giants in the Bitcoin ETF market and the latter is gaining ground.  As Grayscale experiences outflows in its Bitcoin Trust shares (GBTC), can IBIT outshine in reserves?

Grayscale’s Dwindling Bitcoin Reserves

Grayscale Bitcoin Trust (GBTC) is seeing a reduction in Bitcoin holdings as single-day outflows continue. On March 27, Grayscale reportedly saw outflows amounting to under $300 million while IBIT received around $323 million in inflows.

As per Wise Advice, BTC worth $122.6 million was transferred to Coinbase by Grayscale. In contrast to Grayscale’s declining Bitcoin stash, BlackRock’s Bitcoin ETF is seeing a surge. At the time of writing (March 28 2024), cumulative data reveals BlackRock holds 250,667 BTC, narrowing the gap with Grayscale’s 339,536 BTC.

Arkham Intelligence recently noted  that GBTC moved 266,470 BTC out of its wallets to meet redemptions since it started trading. According to the research, Grayscale needed an average of 25,000 BTC. Based on the rate of Bitcoin being sent out to fulfill redemptions, Arkham anticipates that Grayscale will run out of Bitcoin in about three months if nothing changes.

Notably, Grayscale started the year with 618,280 BTC in its fund. This means that at their current rate of redeeming Bitcoin, Arkham sees the reserves depleting in about 14 weeks.

While BlackRock showcases investment interest, Grayscale sold about 1,700 BTC out of an initial 625,000 on March 28.

Bitcoin ETF Inflows Cover for Grayscale

Despite Grayscale’s significant Bitcoin sell-off, the overall market sentiment towards Bitcoin ETFs remains positive. The trend is notable, especially considering that there have been only 11 days of outflows from Bitcoin ETFs since they began trading in January, despite Grayscale liquidating $14.5 billion worth of Bitcoin as per crypto analyst Jelle .

However, CoinShares data for the week until March 23 revealed some investor hesitance.

According to CoinShares , after a record seven weeks of continuous inflows totaling $12.3 billion, digital asset products experienced record weekly outflows of $942 million. However, new ETF issuers witnessed inflows of $1.1 billion, which served to partially mitigate the impact of Grayscale outflows.

At the same time, IBIT has ranked among the top 30 when compared with 11,338 funds. $BITB has even surpassed $GLD, which is a major gold ETF, indicating major investor interest.

BlackRock Gaining Ground

BlackRock Bitcoin ETF is capable of surpassing Grayscale’s Bitcoin holdings, at the current rate of fund outflows. Meanwhile, IBIT has entered the elite performers globally, surpassing even a gold fund.

Since the January debut of Bitcoin ETFs, new Bitcoin ETFs have largely offset the outflows by Grayscale, witnessing 11 days in the red.

About the Author

Shraddha Sharma

Shraddha has around five years of experience as a financial journalist, focusing largely on the Asian markets. Starting her career in Mumbai, India, as a news trainee and producer, she quickly found her niche in crypto. She is keen on learning how emerging technologies affect the broader markets and enjoys explaining complex financial ideas in a way that's easy to understand.

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