In the most recent advancement in the realm of Cryptocurrency investments, the iShares Bitcoin Trust has emerged as the most significant Bitcoin fund, surpassing the earlier market leader Grayscale Bitcoin Trust. By Tuesday, the iShares fund had $1968 billion in assets, slightly outpacing Grayscale $19.65 billion. This significant achievement can be further illustrated by the fact that Fidelity Investments has its own Bitcoin ETF, which currently holds $11.1 billion and is ranked as the third-largest fund in this market.
The increasing popularity of the iShares Bitcoin Trust is part of the Bitcoin ETFs’ upsurge, which only began this year. On January 11th, BlackRock and Fidelity launched their own Bitcoin ETFs alongside Grayscale’s Bitcoin Trust transforming into an ETF. This has helped enhance the chances of an investor getting involved in the cryptocurrency, and Bitcoin rose sharply to an all-time high of $73,798 by March.
Since its inception, the iShares Bitcoin Trust has received many investments, up to $16.5 billion. On the other hand, Grayscale has recorded massive outflows of $17.7 billion within the same period. Industry analysts think those outflows can be explained by Grayscale’s higher fees and arbitrage traders selling their bitcoins on this platform.
BlackRock and Grayscale Investments LLC did not respond to questions regarding these changes. However, in a recent March filing, it has been suggested that Grayscale is planning another fund with lower fees comparable to the current ones.
The Bitcoin investment funds industry changed long ago due to a critical Securities and Exchange Commission (SEC) decision. Subsequently, the SEC finally approved the first U.S. Bitcoin exchange-traded funds in January, a decision after Grayscale filed a lawsuit the previous year.
In 2013, Grayscale introduced the Bitcoin Trust, which was loved and became the market leader among such funds. Despite this, however, because the trust had a closed-ended structure, the share price sometimes fluctuated above or below its net asset value. To overcome this problem, Grayscale has been trying to convert the trust into an ETF to sell the shares much closer to their NAV.
It is essential to understand that the change of trends in the SEC is not limited to merely Bitcoin cryptocurrency ETFs alone. In the latest announcement, the commission said it examines the possibility of allowing ETFs related to Ethereum, the second most popular digital currency based on market capitalization. This comes at a time when SEC Chair Gary Gensler has displayed scepticism and uncertainty about the entire Crypto sector, especially after the emergence of several primary frauds associated with cryptocurrencies.
Nevertheless, there are further debates on whether high-flux altcoins are suitable for investment in ETFs, which have already experienced great success and expansion in their recently debuted Bitcoin ETFs totaling $58.5 billion in assets. There are variations in the legal jurisdictions of the countries regarding this issue, with some countries, including Singapore and China, having banned or restricted investors from investing in such products.
As for the market factor regarding Bitcoin, it has shown significant improvement in value as it quadrupled from the beginning of last year and is still on the rise. This can be attributed in part to the increasing usage of ETFs. When writing this article on Wednesday afternoon, Singapore time, Bitcoin is priced at $68,797 and has increased by 1% since it entered the bear market in the previous year.
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