BlackRock’s IBIT Dominates Bitcoin ETF Market Alone

According to Vetle Lunde, head of research at K33 Research, US-traded Bitcoin ETFs have attracted approximately $26.9 billion in inflows year-to-date. However, this headline figure conceals a critical vulnerability: BlackRock’s iShares Bitcoin Trust (IBIT) alone accounts for roughly $28.1 billion of those flows. This mathematical reality means that without IBIT’s dominant performance, the entire US Bitcoin ETF market would be in net outflows for the year. The product’s relentless accumulation has single-handedly offset redemptions across competitors, particularly Grayscale’s GBTC, which has suffered approximately $24.6 billion in outflows.

The dominance extends beyond mere flow statistics. Data from SoSo Value reveals that since its early 2024 launch, IBIT has seen about $65.3 billion in lifetime inflows compared to $21.3 billion across all other Bitcoin funds combined. This performance gap has widened throughout 2025, with IBIT adding another $28 billion to push its total assets under management past $90 billion, placing it well ahead of any competitor in the Bitcoin ETF ecosystem.

BlackRock’s success with IBIT can be directly attributed to the asset manager’s formidable $12.5 trillion AUM, extensive retail brokerage channels, and deep institutional relationships. As Bloomberg ETF Analyst Eric Balchunas noted, “When BlackRock filed for IBIT, the price was $30,000 and the stench of FTX was still in air. It’s now [over] $110k (a return that is 7x that of the mighty S&P 500) and is now seen as legitimate for other big investors.” This institutional credibility proved transformative for a sector still recovering from a crisis of trust.

The fund has also revolutionized BlackRock’s investor acquisition strategy. The firm revealed that three out of four IBIT investors were entirely new to BlackRock’s iShares product suite, positioning IBIT not just as a crypto ETF but as a powerful client-acquisition engine for the world’s largest asset manager. This expansion into new investor demographics has been complemented by innovative creation mechanisms that have proven particularly appealing to Bitcoin ‘whales’ previously wary of traditional financial institutions.

These custom creation mechanisms allow large Bitcoin holders to transfer their Bitcoin directly to the ETF in exchange for new shares, bypassing the need to sell on the open market. BlackRock has reportedly processed over $3 billion in such in-kind transfers, reflecting strong confidence in its custodial design and long-term exposure model. This combination of institutional credibility and technical innovation has propelled IBIT into BlackRock’s top ten revenue generators, surpassing established funds like the iShares Russell 1000 Growth ETF despite being barely more than a year old.

IBIT’s overwhelming market share—holding over 60% of the approximately 1.3 million BTC collectively held by US Bitcoin ETFs according to Coinperps data—creates significant systemic vulnerabilities. The fund has effectively become Bitcoin’s price floor, with its consistent demand acting as a quasi-monetary inflow that offsets miner sell pressure and exchange outflows. Any reduction in IBIT’s buying activity could remove this crucial support mechanism, potentially widening spreads on US spot exchanges and reducing arbitrage opportunities for market makers.

The concentration risk extends beyond immediate price impacts. Family offices and RIA desks that benchmark performance to IBIT could rebalance away from Bitcoin ETFs entirely if month-over-month flows turn negative. Such withdrawal would lower the ‘liquidity premium’ currently embedded in Bitcoin’s price and could trigger a broader reassessment of institutional sentiment toward cryptocurrency investments.

A sustained stagnation in IBIT inflows might also shift capital toward emerging alternatives, particularly Ethereum and newly launched altcoin ETFs. However, as Vetle Lunde pointed out, BlackRock’s absence from these product suites could limit their overall net flows, suggesting that the IBIT phenomenon may be uniquely tied to BlackRock’s specific market position and distribution capabilities rather than representing broader institutional crypto adoption.