BlackRock bitcoin ETF is outperforming bitcoin

ETFs will likely never track bitcoin exactly, but in the case of BlackRock’s fund, that’s apparently no problem at all

January 12, 2024 12:20 pm

John Hanson Pye/Shutterstock modified by Blockworks

Buyers of spot bitcoin ETFs aren’t buying actual bitcoin — but that’s working out just fine so far for folks buying into BlackRock’s fund.

BlackRock’s iShares Bitcoin Trust (IBIT) has outperformed bitcoin since Thursday’s launch.

Although, it’s perhaps better to say IBIT has performed less poorly than bitcoin. The top crypto has fallen 10.2% since the ETFs went live to IBIT’s 8.9% losses, more than a full percent between them.

Read more: Bitcoin ETF Tracker

In fact, IBIT’s share price is doing better than all its rivals. As of 11:50 am ET, Valkyrie’s BRRR and Franklin Templeton’s EZBC are the worst performing bitcoin ETFs, respectively down 10.6% and 10.8%, practically the same as bitcoin and Grayscale Bitcoin Trust (GBTC).

Newsletter

Subscribe to Blockworks Daily

(The figures above actually started one hour after Thursday’s opening bell to avoid any temporary volatility that may have skewed the data. The first hour is generally to be avoided on regular trading days, let alone on those marking the debut of a brand-new ETF class.)

BlackRock’s ETF is storing value better than bitcoin

Price aside, IBIT and GBTC are so far leading the pack in terms of volume, with $334 million and $1 billion today, respectively.

GBTC, now a spot ETF, was previously a closed-ended fund for which shares could not be redeemed for bitcoin.

It’s unclear at this stage how much capital has flowed out of GBTC and into other funds, if any, but the vehicle had around $29 billion in bitcoin before its conversion earlier this week.

Some discrepancy between the price of bitcoin and the share price of ETFs is to be expected — ETFs offer exposure to the underlying asset and the value of that exposure is influenced by its own supply, demand and liquidity.

Much of the appeal of spot ETFs is that they should track the price of the underlying asset closer than funds with synthetic exposure through futures contracts.

BITO, the largest futures-backed bitcoin ETF with more than $2 billion in assets as of earlier this week, is practically mirroring BlackRock’s fund.

While all this could change on a dime, overperformance in IBIT, or any other beating bitcoin, could be indicative of investor preferences, with those shares in hotter demand relative to the rest.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Newsletter

Blockworks Daily

Upcoming Events

Digital Asset Summit 2025

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

learn more

recent research

Research

Analyst Takes: Post-Election Insights

With the recent election, it’s clear that there will be a meaningful shift in crypto regulations and legislation. Trump is likely as pro-crypto as a president can be. He launched (multiple) of his own NFT collections and is launching an Aave wrapper called World Liberty Fi. He has also spoken out and mentioned that he wants to make the United States "the crypto capital of the planet" and transform it into the "Bitcoin superpower of the world". He proposed creating a strategic national Bitcoin stockpile alongside support from Senator Cynthia Lummis, promising to retain 100% of all Bitcoin held by the U.S. government. More importantly, we’re likely to see deregulation across the board in a lot of industries, with crypto being one of them - as Trump has committed to keeping the crypto market largely unregulated. Crypto, DeFi in particular, has historically been knee-capped by overreaching and hostile governmental agencies and regulation by enforcement, as evidenced by the plethora of Wells notices and lawsuits over the past few years. With Donald Trump winning the presidency, Republicans taking control of the Senate, and being on the verge of securing the House, we think it’s likely that crypto realizes positive regulatory clarity. Below, you can find our analysts’ takes:

by Boccaccio