BlackRock’s IBIT dominance and the shift toward spot Bitcoin ETFs

The 2024 IBIT launch and institutional demand

BlackRock’s iShares Bitcoin Trust (IBIT) manages $63,817.60 million in assets. This dominance followed the fund’s January 2024 launch, where it became the first recently launched Bitcoin ETF to exceed $1 billion in assets during its first week of trading. On January 2, 2026, IBIT saw $287.4 million in inflows, marking its largest single-day intake since October 2024. These inflows occurred as Bitcoin rallied to over $93,000. BlackRock’s IBIT clearly dominates the digital asset ETF market. IBIT holds 25,067 Bitcoin to support its value. The fund’s 1-year return is -25.03%. This growth followed the SEC’s approval of 11 spot Bitcoin ETF applications in early 2024. Before these approvals, investors relied on futures-based products like the ProShares Bitcoin Strategy ETF (BITO), which was approved in October 2021. The regulatory shift occurred after a federal appeals court ruled against the SEC in a Bitcoin ETF-related lawsuit in August. This change allowed firms like BlackRock, Fidelity, and Invesco to launch products that give direct exposure to Bitcoin. After a decade of rejections, the SEC finally permitted these physical Bitcoin ETFs to trade on exchanges on January 11, 2024, which changed the landscape for all digital asset investors.

Comparing spot and futures structures

Spot Bitcoin ETFs differ from futures-based products because they hold actual bitcoin as the underlying asset. While futures-based ETFs like BITO require managers to periodically sell expiring contracts and buy new ones through a process called rolling, spot ETFs hold actual bitcoin to provide direct exposure to price movements. This constant turnover in futures products introduces tracking errors and potential basis risk that can impact total investment returns. If you want direct exposure, spot funds provide a simpler experience by mimicking price movements more closely than derivatives. The heavy concentration of capital in BlackRock’s product makes the $64,800 spot Bitcoin ETF dominance in September 2026 a reality for many institutional investors.

The expense ratios for spot products undercut futures alternatives significantly. BITO charges 0.95%, whereas IBIT costs only 0.25%. BITB has a lower fee of 0.20%, while Grayscale’s GBTC carries a higher fee of 1.50%, which might cause investors to shop around. Fidelity’s FBTC has a 0.25% expense ratio and holds $14,337.50 million. Investors gain exposure to Bitcoin without having to directly purchase or store the cryptocurrency. Will Peck, head of digital assets at WisdomTree, views the spot ETF as a workflow solution for the wealth management channel.

Shrinking relevance of derivatives

The $64,800 spot Bitcoin ETF dominance in September 2026 shows the shrinking relevance of derivatives. BITO currently holds $1,613.24 million in assets, which pales in comparison to the $63,817.60 million held by IBIT. Will Peck, head of digital assets at WisdomTree, stated that he sees little life for futures products once spot Bitcoin ETFs capture the market. However, Michael Sapir, the chief executive of ProShares, claims risk-averse investors will still gravitate toward regulated futures contracts held by major institutions like JPMorgan.

In the earlier stages of the market, the SEC rejected many applications, forcing investors toward products like BITO, which had an expense ratio of 0.95%. Now, the landscape includes 11 approved spot ETFs, including those from VanEck and Invesco. VanEek’s HODL holds $1,192.61 million in assets with a 0.25% expense ratio, while Invesco’s BTCO holds $350 million with a 0.39% expense ratio. Bitwise’s BITB holds $3,096.01 million and maintains a 0.20% expense ratio. Ark 21Shares’ ARKB holds $2,496.31 million and maintains a 0.21% expense ratio. Grayscale’s GBTC holds $10,334.10 million and carries a 1.50% expense ratio, whereas Franklin Templeton’s ETF holds $70 million with a 0.29% expense ratio. Grayscale previously sought to reinvent its $23.3 billion trust as an ETF following the SEC’s initial refusal. Brazilian manager Hashdex is trying to convert its existing bitcoin futures ETF into a spot bitcoin ETF. Ten asset managers filed to launch spot bitcoin ETFs from scratch. Will the dominance of spot products eventually eliminate the need for futures-based trading entirely?