Can Ethereum ETFs boost BlackRock’s holdings above Grayscale’s?

BlackRock has achieved a significant milestone by surpassing Grayscale in ETF holdings for the first time. This shift marks a historical moment in the ETF market landscape. According to a post by Arkham Intelligence, BlackRock’s ETFs IBIT and ETHA have now taken the lead over Grayscale’s ETFs GBTC, BTC Mini, ETHE, and ETH Mini in on-chain holdings, making BlackRock the largest collective holdings provider in this sector.

At the latest count, BlackRock’s ETFs reached $21,217,107,987, slightly edging out Grayscale ETFs, which stood at $21,202,480,698. This development positions BlackRock as the new frontrunner in the ETF market, displacing Grayscale from its long-held dominant position.

The implications of this shift are notably significant for Ethereum and Bitcoin. The cryptocurrency market has witnessed notable movements in ETF flows following this pivotal development. Bitcoin spot ETFs saw a net inflow of around $35.9 million, with substantial contributions from Fidelity ($61.3 million) and BlackRock ($20.4 million). Conversely, Grayscale’s Bitcoin Trust (GBTC) experienced an outflow of $72.9 million.

Similarly, Ethereum ETFs experienced substantial activities. Spot Ethereum ETFs recorded a net outflow of $15 million. Within this category, Grayscale’s ETHE saw an outflow of $27.743 million, while BlackRock’s ETHA and Fidelity’s FETH received inflows of $10.33 million and $7.21 million, respectively. Consequently, the total net flow for Ethereum spot ETFs amounted to $7.352 billion at the latest assessment.

The shift in preference between BlackRock and Grayscale could have a profound impact on the cryptocurrency market, particularly in terms of investor confidence. The demand for ETFs has been on a steady rise year over year, with a notable surge in 2024 following the approval of Bitcoin spot ETFs in January and Ethereum spot ETFs in July.

In 2022, the net share issuance of ETFs totaled $609 billion, slightly dipping to $597 billion in 2023. However, the demand for ETFs skyrocketed in 2024 post the approval of Bitcoin and Ethereum spot ETFs, signaling a significant uptick in investor interest in this investment vehicle.