BlackRock and Fidelity inch closer to becoming two largest Bitcoin holders as ETFs gobble up $5bn

BlackRock and Fidelity have lead the charge among several new spot Bitcoin ETF providers.
Grayscale’s GBTC product experienced billions in outflows, due to profit-taking and fee competition.

BlackRock and Fidelity are leading the charge on spot Bitcoin exchange-traded funds, and are fast becoming two of the most prominent holders.

The two asset managers have attracted $2.7 billion and $2.3 billion to their spot Bitcoin exchange-traded funds, respectively, since January 11.

The total Bitcoin held on behalf of investors by these two firms has reached a combined total of over 100,000, representing about 0.5% of the total 21 million Bitcoin supply that can ever be minted.

By comparison, business intelligence firm MicroStrategy, the world’s largest private Bitcoin holder, holds 189,150 Bitcoin with it acquired for an aggregate price of around $6 billion.

The explosive growth over the past two weeks poses issues for Grasycale, the crypto native digital asset manager.

Grayscale’s flagship fund, the Grayscale Bitcoin Trust, paved the path for spot Bitcoin ETF approval in the US, but could lose out to traditional competitors in the long run.

Grayscale holds around 492,000 Bitcoin, or $21.4 billion, on behalf of its investors, making it the largest spot ETF by far.

Its higher fee model and long list of creditors have seen investors flock to newer offerings like BlackRock or Fidelity.

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This, as well as investors taking profits has resulted in over $5.4 billion in outflows.

BlackRock’s ETF is seeing activity beyond investors reallocating from GBTC though, according to Bloomberg Intelligence ETF analyst, James Seyffart.

Day 13 #Bitcoin ETF Cointucky Derby update. Net inflows of over $247 million. Still had -$221 million pulled from $GBTC though. $IBIT almost traded as much as $GBTC yesterday. pic.twitter.com/EOu2EXx3cD
— James Seyffart (@JSeyff) January 31, 2024

Combined all 10 Bitcoin ETFs in the US account for just over 3% of the current Bitcoin supply, Hildobby, a data specialist at crypto venture fund Dragonfly, said on X.

As Bitcoin’s price stabilises and Grayscale’s outflows slow, the competition for investors is bound to intensify in the coming weeks.

Invesco and Galaxy digital made an early play to entice fresh interest this week, dropping their management fee to 0.25% from 0.39% on Tuesday.

Tyler Pearson is a junior markets correspondent at DL News. Got a hot tip? Reach out to him at ty@dlnews.com.