BlackRock ETF Hits Grayscale in Crypto Asset Battle by $21 Billion

As of Friday, BlackRock's ETF (exchange-traded fund) has surpassed Grayscale for the first time in the chain's holdings to become the market's largest holding.

Rising demand for Bitcoin (BTC) and Ethereum (ETH) continues to fuel institutional interest following ETF approvals. This change highlights the growing confidence among major investors in these digital assets.

BlackRock Dethrones Grayscale ETF Holdings

Arkham Intelligence reported that BlackRock ETF holdings, IBIT and ETHA, grew to $21,217,107,987 on Friday. The increase saw the financial instrument successfully outperform Greyscale's GBTC, BTC Mini, ETHE and ETH Mini worth $21,202,480,698 during the reporting period.

Notably, Grayscale still holds a higher total balance than BlackRock, primarily through the GDLC fund, which holds nearly $460 million in assets under management (AUM). Unlike BlackRock's offerings, GDLC is not an ETF, which allows grayscale to capture a larger share of the market.

Read more: How to trade Bitcoin ETF: A step-by-step approach

Bitcoin ETFs began trading on January 11, and within seven months, BlackRock became the third largest holder of BTC. Bloomberg ETF analyst Eric Balchunas predicts that IBIT will overtake Satoshi Nakamoto's Bitcoin holdings by 2025 if current growth rates continue.

“I didn't realize US ETFs were on track to surpass the Bitcoin Satoshi in October. Blackrock alone is already #3 and is on pace to be #1 by the end of next year,” Balchunas said.

Last week, digital asset investment products brought in a total of $176 million, while BlackRock recorded an inflow of $408 million. In contrast, Grayscale ETFs experienced outflows of up to $552 million, indicating a shift in investor preferences.

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BlackRock's Bitcoin ETF has seen just one day of outflows since its launch, so the latest changes aren't surprising. Recent filings show that major financial institutions such as Capula Management, Goldman Sachs, DRW Capital, and several investment and pension boards were acquiring BlackRock's IBIT.

In contrast, Greyscale is struggling with customer redemption. Clients have been selling their holdings since Bitcoin and Ethereum spot ETFs became accepted. Grayscale's high payout of 2.5%, compared to the industry average of 0.25%, is the main reason.

Fees can affect long-term performance, growing proportionally as the market expands. In response to these concerns, Greyscale introduced the new Mini ETH ETF with lower fees to address outflows from the main ETHE fund. This trend mirrors the firm's Bitcoin Trust, which has experienced significant inflows since its reversal in January.