Bitcoin (BTC) closed 1.5% lower on Tuesday and continued to fall against the US dollar today, bringing the BTC/USD pair over 3% lower week on week to trade at $67,792 at the time of writing.
Despite bitcoin’s indifference, a watershed, albeit widely expected, event has occurred in the bitcoin exchange-traded fund space, with BlackRock Inc (NYSE:NYSE:BLK)’s iShares Bitcoin Trust (IBIT) flipping the Grayscale Bitcoin Trust (GBTC) as the largest bitcoin fund globally.
It brings GBTC’s status as the world’s largest bitcoin investment vehicle to an end after 11 years at the top of the pile.
The US Securities and Exchange Commission (SEC)’s approval of spot-bitcoin ETFs this January opened the door for greater competition in the space, with BlackRock’s heft as the largest asset manager globally giving it instant appeal.
Bloomberg’s ETF analyst Eric Balcunas attributed IBIT’s success to lower fees, superior liquidity and brand name power.
It also represents a shift in influence in the bitcoin markets, with a traditional finance mega cap wresting control of a significant portion of bitcoin’s market capitalisation.
It’s official now. $IBIT is king of the category and prob will be for decades. The low fee + big boy liquidity + iShares brand name is just too powerful (altho there’s plenty of food for everyone). https://t.co/gfeicUz3Iy— Eric Balchunas (@EricBalchunas) May 29, 2024
Ethereum (ETH), the second-largest cryptocurrency, has also seen a shakeup in the ETF space with the first ether-based funds being approved by the SEC last week.
Though it may take a few months for ether ETFs to go live and start producing cash inflows, it has already caused a 3.8% week-on-week bump on spot ether prices.
At the time of writing, the ETH/USD pair was swapping for $3,812.
Global cryptocurrency market capitalisation currently stands at $2.56 trillion, with bitcoin dominance at 52.3%.