BlackRock CEO Stunned by Rapid Growth of Bitcoin ETF; Industry Future Uncertain
Summary:
BlackRock CEO, Larry Fink, has expressed surprise at the rapid growth of his firm's Bitcoin ETF, IBIT, stating that it accumulated $13.5 billion in its first 11 weeks of operation. Currently, the spot Bitcoin ETF holds $17.1 billion in Bitcoin, outperformed only by the Grayscale Bitcoin Trust. However, some industry experts are predicting a potential shutdown of some spot Bitcoin ETFs due to a lack of profitability.
The CEO of BlackRock, Larry Fink, has expressed his delight at the superior performance of the firm's spot Bitcoin (BTC) exchange-traded fund (ETF), IBIT, affirming his strong belief in Bitcoin's longevity. In a March 27 engagement with Fox Business, Fink mentioned that the rapid growth of IBIT surpasses any ETF in the history. Fink found the performance of the iShares Bitcoin Trust (IBIT) in its first 11 weeks surprising after it accumulated $13.5 billion. Fink expressed his satisfaction with IBIT's fluid market that promotes transparency. He had no idea it would garner this much retail demand when the ETF's filing was made.
While he had forecasted IBIT's successes, their magnitude still took him by surprise. He unequivocally values Bitcoin's future prospects, he said. Presently, IBIT's holdings of Bitcoin is about $17.1 billion, as per data from BitMEX Research on March 26. Grayscale Bitcoin Trust still has the largest Bitcoin holdings among the approved ETFs, despite a recent fall in holdings, standing at $23.6 billion in BTC.
Currently, the nine issuers of spot Bitcoin ETFs collectively hold over $34.1 billion in Bitcoin, with IBIT, the Fidelity Wise Origin Bitcoin Fund (FBTC), and ARK 21Shares Bitcoin ETF (ARKB) topping the inflows list. Nevertheless, some experts in the industry foresee a number of spot Bitcoin ETF issuers shutting down due to an inability to make profits.
Most newly formed ETFs may not be able to break even due to cost restraints unless they manage assets worth billions, a milestone some of them may never reach, Hector McNeil, the co-CEO and founder of HANetf, told Cointelegraph. Some small-scale ETF issuers face a stiff competition, so they resort to reducing fees as a way to compete with bigger players. But if they match fees, they won't generate enough revenue to survive, and if they don't cut down fees, they will not amass satisfactory assets to remain operational, according to Bloomberg ETF analyst Henry Jim.
Hashdex, an asset management company, achieved approval for its spot Bitcoin ETF on March 27, making it the latest addition to the competitive spot Bitcoin ETF market in the US.
Published At
3/28/2024 4:08:00 AM
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