BlackRock Inc.’s iShares Bitcoin Trust has become the world’s largest Bitcoin fund, amassing almost $20 billion in total assets since its listing in the US at the start of the year.

A Record-Breaking Milestone

The iShares Bitcoin Trust, an exchange-traded fund (ETF), held $19.68 billion worth of Bitcoin as of Tuesday, surpassing the $19.65 billion held by the Grayscale Bitcoin Trust. The third largest is Fidelity Investments’ Bitcoin ETF, with $11.1 billion in assets.

ETF Launches: A Turning Point for Crypto

BlackRock and Fidelity’s Bitcoin ETFs were among nine that debuted on January 11, the same day Grayscale's decade-old Bitcoin vehicle converted into an ETF. These launches marked a significant milestone for cryptocurrency, making Bitcoin more accessible to investors and driving the token to a record high of $73,798 in March.

Inflows and Outflows

The iShares Bitcoin Trust has seen significant inflows, attracting $16.5 billion since its launch. In contrast, investors have withdrawn $17.7 billion from the Grayscale fund, possibly due to its higher fees and exits by arbitragers.

BlackRock’s Institutional Appeal

A BlackRock spokesperson emphasized the ETF's success, attributing it to investors' preference for accessing Bitcoin through a convenient, institutional-grade product. The spokesperson highlighted BlackRock's commitment to investor education and providing transparent access to Bitcoin.

Grayscale's Response

Grayscale Investments LLC did not immediately respond to requests for comments. However, the firm plans to launch a clone of its main fund with lower fees, according to a regulatory filing in March.

SEC's Stance on Crypto ETFs

The Securities and Exchange Commission (SEC) approved the first US spot-Bitcoin ETFs in January after a court reversal in a case brought by Grayscale. Grayscale's push to convert its Bitcoin Trust into an ETF aimed to eliminate substantial premiums or discounts to its net asset value.

SEC’s Surprising Pivot to Ether ETFs

Last week, the SEC shifted towards allowing ETFs for Ether, the second-largest cryptocurrency by market value. Despite the agency's overall skepticism towards the crypto industry, this move signifies a potential shift in regulatory attitudes.

Global Perspectives and Market Impact

While Bitcoin funds have been hailed as successful, critics argue that volatile digital assets are unsuitable for widespread adoption. Some countries, like Singapore and China, restrict or ban investor access to cryptocurrencies. In contrast, firms like Vanguard have no plans to offer crypto-related products, according to a spokesperson in January.

Bitcoin has experienced a significant recovery, quadrupling in value since the beginning of last year. As of 7:39 a.m. Wednesday in New York, Bitcoin was trading at $67,757, reflecting its robust recovery from the 2022 bear market.