Bitcoin rally pushes BlackRock ETF over $10bn in record time

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BlackRock’s bitcoin exchange-traded funded has reached $10bn faster than any US ETF in history, fuelled by a rally that continues to send the world’s largest cryptocurrency to record heights.

BlackRock’s iShares Bitcoin Trust (IBIT) needed less than two months from its January 11 launch to reach that landmark, beating Invesco QQQ’s record of just over a year, according to Morningstar. IBIT’s total assets now sit at around $12.7bn, a combination of bitcoin’s appreciation and more than $7bn in net inflows.

IBIT and the other nine spot bitcoin ETFs to which the Securities and Exchange Commission gave the green light on January 11 have been buoyed by a rally that sent the price of bitcoin over $70,000 on Friday, setting a new high before settling around $68,500 as of Friday afternoon.

The 10 spot bitcoin ETFs earned net inflows of about $7bn combined from their mid-January launch through the end of February, including $8.5bn that investors have withdrawn from the $27.5bn Grayscale Bitcoin Trust ETF (GBTC), according to data from Morningstar Direct. The Fidelity Wise Origin Bitcoin ETF has amassed about $7.6bn in assets, putting it in position to be the second-fastest to reach $10bn after its iShares peer.

Much of the recent investments in the bitcoin ETFs appear to be from investors who were “trapped inside GBTC” and have exited the priciest bitcoin ETF in favour of a less costly alternative, said Dave Nadig, a longtime ETF observer who has been studying bitcoin ETF trading patterns.

Much of the large trading volumes in bitcoin ETFs in recent weeks has been a result of high-frequency traders, Nadig said. “It’s just algo players trying to scalp pennies.”

While high-frequency traders and hedge funds have become increasingly interested in bitcoin ETFs and the potential for arbitrage, the bulk of new assets moving BlackRock’s new…