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The ETF Capitals Race: BlackRock May Outpace Grayscale in Three Weeks

BlackRock's ETF gains momentum and threatens GrayScale’s position

BlackRock's venture into the Bitcoin market is swiftly gaining traction, with its spot Bitcoin ETF on the verge of eclipsing the Grayscale Bitcoin Trust (GBTC) in terms of Bitcoin holdings. As of March 22, BlackRock's ETF impressively held 238,500 BTC, translating to a valuation of $15.5 billion at current market prices. This surge is backed by an average daily inflow of $274 million, approximately equating to 4,120 new Bitcoins being added to the fund daily.

In contrast, Grayscale's GBTC, once the unchallenged giant in the institutional Bitcoin holdings space, reports holding an estimated 350,252 BTC, valued at $23 billion. However, it's currently facing an average daily outflow of $277 million, or about 4,140 BTC, indicating a possible shift in investor preference or strategy.

George Tung, a well-regarded YouTuber, emphasized this imminent shift on his CryptosRUs channel.

He stated on March 20: 

"BlackRock is going to flip Grayscale soon," 

"I say within the next two weeks — it’s going to happen." 

This prediction underscores the remarkable momentum BlackRock's Bitcoin ETF has garnered, setting the stage to potentially become the world's largest institutional holder of Bitcoin.

Potential market impacts and analyst perspectives

The impending overtaking of Grayscale by BlackRock's Bitcoin ETF has not only caught the attention of crypto enthusiasts but also sparked discussions among market analysts regarding its potential impact on Bitcoin's market dynamics. Notably, GBTC experienced a record $643 million net outflow on March 18, marking its largest withdrawal day, which led some analysts to speculate about possible increased volatility in Bitcoin's price.

However, Eric Balchunas, a Senior Bloomberg ETF analyst, offers a more tempered view, suggesting that the GBTC-led outflows may soon dwindle. 

 He predicted:

"The exodus could be over almost entirely within the next few weeks," 

He attributes the bulk of recent outflows to the bankruptcies of significant crypto firms such as Genesis and Digital Currency Group, which he describes due to their "size and consistency."

Adding to the narrative, on March 10, BlackRock's ETF achievement of surpassing MicroStrategy’s Bitcoin holdings further solidified its position in the crypto space. MicroStrategy, known for its substantial Bitcoin investments, holds 214,246 BTC after adding 9,000 BTC to its reserves on March 19.