In the last year, the surge in Bitcoin’s exchange-traded fund (ETF) activity has been hailed as evidence of Wall Street’s newfound acceptance of crypto. Nonetheless, the underlying figures tell a more delicate tale.
On October 28, Vetle Lunde, head of research at K33 Research, highlighted that US Bitcoin ETFs have seen approximately $26.9 billion in inflows year-to-date.
However, this headline figure masks a significant disparity, as BlackRock’s iShares Bitcoin Trust (IBIT) alone represents roughly $28.1 billion of that total.
In essence, Bitcoin ETFs would have seen net outflows this year without IBIT. The relentless growth of this product has counteracted redemptions from other offerings, maintaining overall positive inflows and reinforcing the narrative of institutional adoption of Bitcoin.
A market dominated by a single fund
Since its launch in early 2024, IBIT has set the standard in nearly every aspect of ETF performance.
According to SoSo Value data, it has achieved approximately $65.3 billion in cumulative inflows, compared to a mere $21.3 billion from all other Bitcoin funds combined.
Meanwhile, Grayscale’s GBTC has experienced around $24.6 billion in redemptions, further illustrating that without IBIT, the broader picture would be quite discouraging.
This underscores the notion that BlackRock’s IBIT stands alone in its scale.
The fund secured $37 billion during its inaugural year and has since brought in another $28 billion in 2025, raising its total assets under management to over $90 billion, far surpassing competitors.
Based on Coinperps data, Bitcoin ETFs collectively possess around 1.3 million BTC, with IBIT holding more than 60% of that total.
The reasons behind BlackRock’s IBIT supremacy
A key factor in IBIT’s ascendancy is BlackRock’s ability to leverage its $12.5 trillion assets under management, retail brokerage networks, and institutional connections to drive demand toward this flagship product.
The company’s entrance into this emerging space instantly added credibility to a sector grappling with a significant trust deficit.
Eric Balchunas, a Bloomberg ETF Analyst, commented:
“When BlackRock applied for IBIT, Bitcoin was priced at $30,000, amidst the fallout from FTX. It’s now [over] $110k (yielding a return that is 7x greater than the impressive S&P 500) and has gained legitimacy amongst larger investors.”
Additionally, the recent accomplishments of the fund can be attributed to Bitcoin’s impact on BlackRock’s investor demographic.
Last year, the company reported that 75% of IBIT investors were completely new to BlackRock’s iShare offerings.
This indicates that IBIT has evolved into not just a Bitcoin ETF but also a tool for acquiring clients for the world’s largest asset manager.
Moreover, BlackRock’s tailored creation mechanisms have gained traction among substantial Bitcoin holders, or “whales,” who previously avoided traditional financial entities. These mechanisms facilitate the direct transfer of Bitcoin to the ETF in exchange for new shares, eliminating the need for on-market sales.
To date, the firm has reportedly managed over $3 billion in such in-kind transfers, reflecting robust confidence in its custodial operations and long-term investment strategy.
This significant market presence has created a halo effect, resulting in notable profitability for BlackRock.
Less than a year old, IBIT ranks among BlackRock’s top ten revenue sources, surpassing many established funds like the iShares Russell 1000 Growth ETF.
What occurs when the inflows decrease?
IBIT’s profound dominance in the Bitcoin ETF market raises concerns about what might happen when its inflows eventually wane.
If IBIT’s inflows diminish, the immediate repercussions would impact market liquidity and price stability. Given its current scale, even a slight decline in purchases could eliminate a crucial source of steady demand. This demand has effectively acted as a quasi-monetary inflow, counteracting miner selling pressure and exchange withdrawals.
A slowdown would widen spreads on US spot exchanges, reduce arbitrage possibilities for market makers, and disrupt the feedback mechanism that has kept Bitcoin’s price supported above essential levels. Essentially, the ETF bid has formed a foundational support for Bitcoin, with IBIT representing a substantial portion of that demand.
The cascading effects would also influence institutional sentiment.
If there are negative flows month-over-month, family offices and RIA desks that use IBIT as a benchmark might entirely withdraw from Bitcoin ETFs. Such a retreat would diminish the “liquidity premium” currently factored into Bitcoin’s pricing.
Lastly, a prolonged stagnation in IBIT inflows could redirect capital to Ethereum and newly introduced altcoin ETFs, potentially degrading Bitcoin’s dominance ratio.
However, Lunde pointed out that BlackRock’s absence from those product offerings could limit their overall net inflows.
