How BlackRock’s IBIT creation basket mechanics work

BlackRock expanded its IBIT Authorized Participant list from four to nine. The new participants include ABN AMRO Clearing USA LLC, Citadel Securities LLC, Citigroup Global Markets, Inc., Goldman Sachs & Co. LLC, and UBS Securities LLC. The existing list includes Jane Street Capital, LLC, JP Morgan Securities LLC, Macquarie Capital (USA) Inc., and Virtu Americas LLC. APs are the only investors who can create or redeem new shares of an ETF. They assemble a portfolio of securities that mirrors the ETF strategy, known as a "creation basket". This differs from mutual funds, where the fund company must buy securities when investors pour in new money. I noticed a shift in liquidity when IBIT recorded a $19.53 million outflow on September 9. This drawdown occurred alongside a $120.2 million total net outflow for the Bitcoin ETF complex. On that same day, ARK 21Shares’ ARKB led the retreat with $77.98 million in redemptions. The expansion of the AP list helps the liquidity and accessibility of IBIT.

APs manage the ETF liquidity.

APs keep the IBIT market price near its Net Asset Value (NAV). When IBIT trades at a premium, an AP buys the underlying Bitcoin and then sells ETF shares on the open market to earn a basically risk-free arbitrage profit. If the fund trades at a discount, the AP redeems ETF shares for the underlying assets in the redemption basket. This process relies on the AP handling all transaction costs. APs can perform ETF transactions even after the markets are closed because they receive daily disclosures of the fund’s holdings. The process is typically in-kind, meaning the AP exchanges the actual securities for new shares rather than cash. This in-kind method helps maintain tax efficiency for investors.

The BTC-per-share ratio for IBIT is 0.0005662. This ratio decreases because BlackRock deducts a 0.25% annual expense ratio from the fund’s Bitcoin holdings. You should understand that this fee drag means each share represents less Bitcoin over time. I calculate the current ratio at 1,766 shares per Bitcoin. The ratio changes daily.

The concentration is extreme.

IBIT is the load-bearing wall of the Bitcoin ETF market. On September 3, IBIT absorbed $454 million, which accounted for 62% of the total $730.9 million inflow. This single fund’s dominance creates a massive vulnerability for the whole market structure. If the institutional allocators behind IBIT decide to reduce exposure, two-thirds of the daily market bid will vanish. In August, IBIT alone took $503 million during a session where the total complex saw $606.3 million. On September 1, IBIT accounted for $201 million of a $236 million outflow. I find the current level of IBIT’s dominance in the creation flow to be a major structural flaw. The concentration of capital inside a single fund carries real implications for the broader market. When one product like IBIT accounts for 60% to 80% of daily flows, its reversals distort perceptions of demand strength. The market capitalization of IBIT reached $149.72 billion in April 2026. With an average daily volume of 58.66 million shares, IBIT processes hundreds of millions of dollars in daily transactions. IBIT holds 49% of the U.S. spot Bitcoin ETF market by AUM, while Fidelity’s FBTC holds approximately 15%. The fee spread remains wide, with IBIT in the mid-twenties basis points and Grayscale’s GBTC at 1.50%. Can the market survive if the primary allocator exits?