Through its exchange-traded funds (ETFs), BlackRock has become the biggest owner of on-chain cryptocurrency assets, beating Grayscale. This is a big change in the way people invest in digital assets.
This important milestone, reached on Friday, shows that institutions are becoming more positive about cryptocurrencies like Bitcoin and Ethereum. This is because more ETFs are being approved.
Arkham Intelligence says that BlackRock’s ETF holdings in its IBIT and ETHA funds have hit an amazing $21.22 billion. This is just slightly more than Grayscale’s combined holdings of $21.20 billion across its GBTC, BTC Mini, ETHE, and ETH Mini funds.
Even though BlackRock has been holding more ETFs lately, Grayscale still has a bigger total balance. This is mostly because of its GDLC fund, which has about $460 million in assets. Since the GDLC fund is not an ETF, Grayscale can keep a bigger market share.
With its rise in the crypto market, especially since January when it released its Bitcoin ETFs, BlackRock is now a strong rival. Eric Balchunas, an ETF analyst at Bloomberg, says that if current growth trends continue, BlackRock’s IBIT ETF could hold more Bitcoin than Satoshi Nakamoto’s Bitcoin assets by 2025.
“By October, US ETFs are expected to hold more Bitcoin than Satoshi.” Balchunas said, “BlackRock is already third and on track to be first by the end of next year.”
New research shows that people are becoming more interested in BlackRock’s crypto products. Last week, $176 million was invested in digital asset investment products, and Crypto ETFs brought in $408 million. Grayscale ETFs, on the other hand, lost a lot of money $552 million which shows that investors’ tastes have changed.
BlackRock Gaining Ground, Grayscale Facing Challenges
BlackRock’s ETFs are becoming increasingly popular among big banks like Capula Management, Goldman Sachs, and DRW Capital. On the other hand, Grayscale is losing customers because spot ETFs are becoming more popular and competing with it.
Grayscale has been having a hard time because it charges 2.5% in fees, which is higher than the industry average of 0.25%. In answer, Grayscale made the Mini ETH ETF, which has lower fees, to stop money from leaving its main ETHE fund.
To add to the picture, BlackRock CEO Larry Fink recently said that Bitcoin is “digital gold” and a “legitimate” form of money. In a recent interview, Fink talked about Bitcoin’s promise as an investment with returns that are not tied to the currency’s value. This makes it especially appealing when the unstable economy and the currency’s value fall.,
The changing relationship between BlackRock and Grayscale shows how the cryptocurrency investment market changes as competition and institutional interest continue to change.
