BlackRock’s Bitcoin ETF has become one of the fastest-growing funds in 2024, with nearly $1.5 billion in advisor-driven inflows.
Bitwise Chief Information Officer (CIO) Matt Hougan emphasized that investment advisors are adopting spot Bitcoin (BTC) exchange-traded funds (ETFs) at a faster pace than any other ETF in recent history. His comments came in response to a Sept. 8 social media post by researcher Jim Bianco, who claimed that less than 10% of the assets under management (AUM) in U.S.-traded spot Bitcoin ETFs come from investment advisors. Bianco argued that these ETFs are more of a “small tourist tool” rather than a major adoption vehicle.
Hougan examined the $1.45 billion in net flows into BlackRock’s iShares Bitcoin Trust (IBIT) tied to investment advisors. While this is a small portion of the total $46 billion in inflows into spot Bitcoin ETFs, he pointed out that if you focus solely on the advisor-driven flows, IBIT would rank as the second fastest-growing ETF launched in 2024 out of over 300 new funds. The only ETF surpassing it is KLMT, an ESG fund seeded by a single investor with $2 billion and little investment advisor involvement.
Hougan further highlighted that despite the relatively modest amount invested by advisors compared to other investors, their adoption of Bitcoin ETFs is historically unprecedented. He noted that the large inflows from other investors tend to overshadow the significant advisor-driven inflows.
Bloomberg’s senior ETF analyst, Eric Balchunas, agreed with Hougan, noting that the nearly $1.5 billion in advisor allocations represents more “organic inflows” than any other ETF launched this year.
Jim Bianco’s initial post was prompted by the significant outflows from U.S.-traded spot Bitcoin ETFs during the previous week. According to Farside Investors, these funds saw $706 million in outflows, with $288 million occurring on Sept. 3. However, Balchunas pointed out that this represents just 0.5% of Bitcoin ETFs’ total AUM, which he doesn’t consider “too staggering.” He also explained that it’s important to measure an ETF’s health based on its flows, as AUM can shrink if asset prices decline.
Balchunas concluded by noting that Bitcoin ETFs have over 1,000 institutional holders after just two 13F reporting periods, calling this level of adoption “beyond unprecedented.” He also expects that 20% of IBIT’s shares, currently held by institutions and large advisors, will rise to 40% over the next 12 months.
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