The BlackRock iShares Bitcoin ETF (IBIT) has become the first spot bitcoin product to reach $2 billion in assets under management (AUM). This milestone does not include Grayscale’s GBTC, which had nearly $30 billion in AUM at the time of its conversion from a closed-end fund to a spot ETF.
On Thursday, investors added approximately $170 million to IBIT, leading the fund to purchase nearly 4,300 additional bitcoin (BTC). This brought the total number of tokens held by the fund to 49,952. With the price of bitcoin surging above the $40,000 level early Friday, the AUM of IBIT surpassed $2 billion.
With over $2 billion in AUM, IBIT now ranks third in asset gathering among all the more than 600 ETFs launched in the past year. Nate Geraci, the president of ETF Store, believes that IBIT could soon take over the number one spot. The next fund expected to cross the $2 billion mark is Fidelity’s Wise Origin Bitcoin Fund (FBTC), which held just under 44,000 bitcoin as of January 25.
The achievement of reaching $2 billion in AUM highlights the growing popularity and acceptance of bitcoin as an investment asset. The BlackRock iShares Bitcoin ETF has attracted significant investor interest, and its success may pave the way for more institutional investors to enter the cryptocurrency market.
The rise of bitcoin ETFs provides a regulated and accessible way for investors to gain exposure to the cryptocurrency without directly owning and storing it. These ETFs offer a convenient and familiar investment vehicle for traditional investors who may be hesitant to directly invest in bitcoin due to its volatility and perceived risks.
The success of IBIT also reflects the increasing demand for bitcoin as an investment. Despite its price volatility, bitcoin has proven to be a lucrative investment for many, with its value reaching new all-time highs in recent years. As more investors recognize the potential of bitcoin as a store of value and a hedge against inflation, the demand for bitcoin-related investment products is expected to continue growing.
However, it is worth noting that investing in bitcoin and bitcoin ETFs still carries risks. The cryptocurrency market is highly volatile, and the value of bitcoin can fluctuate dramatically in a short period. Investors should carefully consider their risk tolerance and conduct thorough research before investing in bitcoin or any bitcoin-related products.
Overall, the BlackRock iShares Bitcoin ETF’s achievement of reaching $2 billion in AUM marks a significant milestone in the cryptocurrency industry. It demonstrates the increasing acceptance and demand for bitcoin as an investment asset, and it may encourage more institutional investors to explore the cryptocurrency market. As the popularity of bitcoin continues to rise, it will be interesting to see how the landscape of bitcoin ETFs evolves and whether they can maintain their growth and success in the long term.