Over the past year, the rise of Bitcoin exchange-traded funds (ETFs) has been celebrated as proof that Wall Street has finally embraced cryptocurrencies. However, the figures reveal something much more fragile.
On October 28, Vetle Lunde, head of research at K33 Research, noted that US-traded Bitcoin ETFs have attracted around $26.9 billion in inflows so far this year.
However, that headline figure masks a stark imbalance: BlackRock’s iShares Bitcoin Trust (IBIT) alone accounts for roughly $28.1 billion of those flows.
In other words, Bitcoin ETFs would suffer net outflows this year without IBIT. The relentless buildup of the product has single-handedly offset refunds among competitors, keeping aggregate inflows positive and sustaining Bitcoin’s institutional adoption narrative.
A market controlled by a fund
Since its launch in early 2024, IBIT has dominated all important performance metrics in the ETF ecosystem.
According to SoSo Value data, it has received around $65.3 billion in lifetime inflows, compared to $21.3 billion in all other Bitcoin funds combined.
Meanwhile, Grayscale’s GBTC has suffered approximately $24.6 billion in refunds, confirming that without IBIT, the aggregate outlook would be deeply negative.
This effectively means that BlackRock’s IBIT scale is in a league of its own.
The fund earned $37 billion in its debut year and has added another $28 billion so far in 2025, bringing its total assets under management to more than $90 billion, far ahead of any competitor.
According to Coinperps data, Bitcoin ETFs collectively hold around 1.3 million BTC, with IBIT making up more than 60% of that total stash.
Why BlackRock’s IBIT was able to dominate
A significant part of IBIT’s growth can be linked to the fact that BlackRock has used its $12.5 trillion assets under management, retail brokerage channels and institutional relationships to channel demand into a single flagship product.
The asset manager’s entry into the emerging industry instantly conferred legitimacy on a sector still reeling from the broader crisis of confidence.
Bloomberg ETF analyst Eric Balchunas said:
“When BlackRock applied for IBIT, the price was $30,000 and the stench of FTX was still in the air. Now it’s [over] $110,000 (a return seven times that of the mighty S&P 500) and is now considered legitimate for other large investors.”
Aside from that, the fund’s recent success can also be linked to how Bitcoin has transformed BlackRock’s investor base.
Last year, the company revealed that three out of four IBIT investors were completely new to BlackRock’s iShare suite of products.
This shows that IBIT has become not only a crypto ETF, but also a customer acquisition engine for the world’s largest asset manager.
In fact, custom asset manager creation mechanisms have become increasingly popular among large Bitcoin holders, or “whales,” who were once wary of traditional financial institutions. These mechanisms allow investors to transfer their Bitcoin directly to the ETF in exchange for new shares, avoiding the need to sell on the open market.
To date, the company has reportedly processed more than $3 billion in in-kind transfers, reflecting strong confidence in its custody design and long-term exposure model.
This strong dominance has created a halo effect that has been very profitable for BlackRock.
Just over a year into existence, IBIT already ranks among BlackRock’s top ten earners, surpassing long-standing funds like the iShares Russell 1000 Growth ETF.
What happens when flows decrease?
IBIT’s overall dominance in the Bitcoin ETF space raises the question of what will happen when its numbers finally decline.
If IBIT inflows decline, the immediate impact would be felt on market liquidity and price stability. At its current size, even a modest reduction in purchases could eliminate a major source of steady demand. This demand has acted as a quasi-monetary entry, offsetting the sales pressure of the miners and the outflows of foreign currency.
Therefore, a slowdown would widen spreads on US spot exchanges, reduce arbitrage opportunities for market makers, and weaken the feedback loop that has kept Bitcoin’s price anchored above key support levels. In essence, the ETF supply has become Bitcoin’s floor, and the IBIT represents the majority of that supply.
The knock-on effects would also impact institutional sentiment.
If month-over-month flows turn negative, family offices and RIA desks that benchmark performance against IBIT could completely rebalance and move away from Bitcoin ETFs entirely. That withdrawal would reduce the “liquidity premium” currently included in the price of Bitcoin.
Finally, a sustained stagnation in IBIT inflows could shift capital toward Ethereum and recently launched altcoin ETFs, eroding Bitcoin’s dominance index.
However, Lunde noted that BlackRock’s absence from these product sets could limit its overall net flows.