The IBIT spot Bitcoin ETF of BlackRock has just set a historical record, as less than a year since its launch on January 11, 2024, it managed to exceed 500,000 BTC in AUM. The very fast growth and an AUM close to $50 billion reflect the tremendous interest that institutional and retail investors have been showing for regulated investment vehicles into Bitcoin.
BlackRock, as an ETF pioneer, made exposure to Bitcoin much easier and more accessible, driving its increased adoption within mainstream financial portfolios. This has represented an important change in the perception of Bitcoin as a legitimate asset class: it represents increasing acceptance within the global financial markets.
Milestone Achievement and Market Impact
BlackRock’s IBIT spot Bitcoin ETF surpassed 500,000 BTC on December 4, 2024. This marks about 2.38% of the entire supply of 21 million coins of Bitcoins. The fund has been a major player with assets worth $48 billion.
By November 29, 2024, the ETF had accumulated 496,854 BTC; a net inflow of $338.3 million, which translated to roughly 3,526 BTC, took it past 500,000 BTC. Such rapid growth positions IBIT as the third-strongest ETF in the United States by YTD flow and surpasses such notable competitors as the Invesco $314 billion QQQ fund.
“BlackRock breaking 500,000 BTC is another massive milestone coming off the back of a tremendous launch year,” commented Vetle Lunde, Head of Research at K33. “The ongoing inflows underscore the ETF’s contribution to making Bitcoin more accessible for both institutional and retail investors and, by doing so, driving all-time high prices for BTC.”
Bitcoin’s price stands around $95,321 after gaining 38% from March when BlackRock CEO Larry Fink declared IBIT as “the fastest-growing ETF in history.”
Road to 1 Million BTC and Strategic Implications
BlackRock’s ETF is expected to remain on the upward trend, with institutional ownership reaching 24% at the end of Q3 2024. According to Lunde, large funds will likely invest 1-3% of their portfolio in Bitcoin ETFs when the latter improves its risk-adjusted returns. It might push IBIT’s holding up to 1 million BTC. Peter Chung, Head of Research at Presto, said, “With 500K BTC in hand, IBIT has already surpassed MSTR’s holdings in less than a year. These assets belong to shareholders, not BlackRock, so hitting 1 million BTC is achievable.
Chung further indicated a parallel between the potential holdings by IBIT and the 1 million BTC reserve proposed in Senator Cynthia Lummis’s Bitcoin Strategic Reserve Bill for the U.S. government. Holding 1 million BTC would equate to 5% of Bitcoin’s total supply, mirroring the U.S. government’s share of global gold reserves. The continued inflows into Bitcoin ETFs, such as BlackRock’s, have also impacted the performance of Bitcoin in the market. Experts attribute the strength in cryptocurrency prices due to better access through ETFs.
Bitcoin ETFs and the Competition with Satoshi’s Holdings
The net inflows since the introduction of U.S. spot Bitcoin ETFs have stood at $31.2 billion, of which $6.6 billion inflow occurred in November 2024. Collectively, the ETFs have gained an amount that will bring them near the 1.1 million BTC attributed to the pseudonymous creator of Bitcoin called Satoshi Nakamoto.
Satoshi’s estimated holdings are based on early Bitcoin mining patterns, identified through the “Patoshi Pattern,” which suggests he mined approximately 22,000 blocks at 50 BTC per block. While this analysis estimates Satoshi’s holdings at 1.1 million BTC, some researchers believe the figure could range between 600,000 and 1.5 million BTC due to unverified assumptions and overlapping mining activity.
Meanwhile, the Ethereum ETFs in the US spot also are gaining popularity while BlackRock’s ETHA happens to lead November’s record flows into the tune of $1.1 billion.
As ETF products of both Bitcoin and Ethereum continue to achieve market acceptance, broader market participation in the cryptocurrency space, particularly through digital assets, will contribute towards their mainstream integration with conventional investment portfolios.
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