Without BlackRock’s IBIT, potential outflows are faced by Bitcoin ETFs, showcasing a fragile market balance.
Over the past year, Bitcoin’s exchange-traded fund (ETF) boom has been celebrated as proof that Wall Street has finally embraced crypto. Yet, something far more fragile is revealed by the numbers.
On Oct. 28, it was noted by Vetle Lunde, head of research at K33 Research, that US-traded Bitcoin ETFs have attracted about $26.9 billion in inflows year-to-date.
However, that headline figure hides a stark imbalance that is accounted for by BlackRock’s iShares Bitcoin Trust (IBIT) alone, roughly $28.1 billion of those flows.
In other words, Bitcoin ETFs would be in net outflows this year without IBIT. The product’s relentless accumulation has single-handedly offset redemptions across competitors, keeping aggregate inflows positive and sustaining Bitcoin’s narrative of institutional adoption.
A Market Dominated by a Single Fund
Since launching in early 2024, every major performance metric in the ETF ecosystem has been dominated by IBIT.
According to SoSo Value data, about $65.3 billion in lifetime inflows have been seen by it, compared to $21.3 billion across all other Bitcoin funds combined.
Meanwhile, roughly $24.6 billion in redemptions has been suffered by Grayscale’s GBTC, confirming that without IBIT, the aggregate picture would be deeply negative.
This effectively means that a league of its own is stood in by BlackRock’s IBIT scale.
In its inaugural year, $37 billion was attracted by the fund, which has since accumulated another $28 billion during 2025. This momentum has driven its total managed assets beyond $90 billion, placing it significantly ahead of all rivals.
Based on Coinperps data, Bitcoin ETFs collectively possess roughly 1.3 million BTC. Over 60% of that complete pool is controlled by IBIT.
How BlackRock’s IBIT Rose to Market Dominance
A significant part of IBIT’s growth can be linked to how its $12.5 trillion AUM, retail brokerage channels, and institutional relationships have been utilized by BlackRock to channel demand into a single flagship product.
Validation was instantly bestowed upon the emerging industry by the asset manager’s entry, a sector still grappling with a widespread crisis of trust.
“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.”
Eric Balchunas, Bloomberg ETF Analyst, said:
Moreover, the fund’s recent triumph can also be linked to the transformation of BlackRock’s investor base that has been effected by Bitcoin.
Last year, it was disclosed by the firm that three out of every four IBIT investors were entirely new to BlackRock’s iShare product range.
This clearly indicates that IBIT has become not merely a crypto ETF, but it has also evolved into a client-acquisition engine for the world’s largest asset manager.
Indeed, the asset manager’s custom creation mechanisms have become increasingly favored by large Bitcoin holders, or “whales,” who previously harbored distrust toward conventional financial institutions. These procedures permit investors to transfer their Bitcoin straight into the ETF in return for new shares, thus avoiding the necessity of selling on the open market.
Up until now, more than $3 billion in such in-kind transfers has reportedly been processed by the firm, demonstrating robust faith in its custodial structure and long-term exposure approach.
This substantial ascendancy has engendered a halo effect that has proven highly lucrative for BlackRock.
Having existed for barely more than a year, IBIT already stands as one of BlackRock’s top ten revenue generators. Long-standing funds, such as the iShares Russell 1000 Growth ETF, have been surpassed by it.
What Happens When Inflows Start to Slow?
The pervasive ascendancy of IBIT within the Bitcoin ETF sector prompts the question of what will occur when its figures eventually decline.
Should IBIT’s capital influx diminish, the immediate effects would be observed across market liquidity and price stability. Given its present scale, even a slight decrease in purchasing activity could eliminate a notable origin of continuous demand. This demand has served as a quasi-monetary inflow, counteracting the selling pressure from miners and the capital moving out of exchanges.
A slowdown would consequently broaden spreads on US spot exchanges, diminish arbitrage opportunities for market makers, and weaken the feedback mechanism that has maintained Bitcoin’s price above crucial support levels. Essentially, Bitcoin’s floor has become the ETF bid, and IBIT constitutes the majority of that bid.
The resulting knock-on effects would also ripple through institutional sentiment.
Should capital flows become negative on a month-over-month basis, family offices and RIA desks that benchmark performance to IBIT could completely rebalance their holdings away from Bitcoin ETFs. That divestment would decrease the “liquidity premium” currently integrated into Bitcoin’s price.
Finally, a prolonged halt in IBIT’s capital inflows could cause funds to be redirected toward Ethereum and recently introduced altcoin ETFs, thereby diminishing Bitcoin’s dominance ratio.
Nonetheless, it was indicated by Lunde that BlackRock’s non-participation in these product offerings could restrict their total net capital influx.
