Blackrock is winning the crypto ETF race. Its iShares Bitcoin Trust (IBIT) has grown to become the biggest ETF in the industry with over $21 billion in assets, a move that has flipped the Grayscale Bitcoin Trust (GBTC), which had a pole position in the industry.
Blackrock’s ETHA ETF has $742 million in assets
Blackrock is now leading the charge to pass the highly expensive Grayscale Ethereum Trust (ETHE), which still has over $4.9 billion in assets, down from almost $10 billion last month. Blackrock’s Ethereum Trust (ETHA) has added over $742 million in assets, and if the trend continues, it could hit $1 billion soon.
It is followed by Fidelity’s FETH ETF, which has over $281 million in assets, and Bitwise (ETHW) and VanEck (ETHW), which have $232 million and $65 million.
Blackrock is seeing more inflows because of its reputation in the financial services industry, with over $10.6 trillion in assets under management (AUM). Some of its other biggest ETFs are the iShares S&P 500 (IVV), which has over $497 billion in assets, and the iShares Core MSCI EAFE ETF, which has over $117 billion.
The ETHA ETF has a terminal expense ratio of 0.25%, making it more expensive than Bitwise’s ETHW, which charges just 0.15%. As such, fundamentally, ETHW is a better fund to invest in because of its lower costs and the fact that, like ETHA, its ETH coins are held by Coinbase, the biggest US exchange and custodian with over $171 billion in assets.
Ethereum inflow data show that their uptake is not as strong as we saw in Bitcoin in January. At the time, Blackrock’s IBIT reached $1 billion within a few weeks.
This performance is likely because Ethereum is fundamentally different from Bitcoin. First, Ethereum ETF investors will lose about 3.75% annually in opportunity cost.
In addition to paying 0.25%, they will forego Ethereum’s staking yield, which stood at 3.50% on Wednesday. A 3.75% annual return is a substantial one, especially when one has held it for years.
