BlackRock’s IBIT Faces Challenges in Surpassing SPY and VOO: Balchunas

Bloomberg ETF analyst Eric Balchunas recently weighed in on the potential of BlackRock’s spot Bitcoin ETF (IBIT) surpassing major ETFs like SPDR S&P 500 ETF Trust (SPY) and Vanguard S&P 500 ETF (VOO). Responding to X user @rafaelnobel, Balchunas dismissed the idea, citing significant hurdles.

Balchunas noted that while IBIT achieved $50 billion in BTC holdings in its first year, surpassing traditional market leaders requires much higher adoption and inflows. Additionally, IBIT’s performance is closely tied to the stock market, making it difficult to outpace ETFs like VOO, IVV, and VTI. As of February 17, IBIT holds 587,050 BTC, but Balchunas remains skeptical about its ability to dominate the ETF market.

Meanwhile, MicroStrategy, now rebranded as Strategy, has temporarily halted Bitcoin purchases. Executive Chairman Michael Saylor announced that the company did not sell any class A common stock last week under its at-the-market equity offering program, meaning no additional Bitcoin acquisitions were made. Strategy currently holds 478,740 BTC, acquired for approximately $31.1 billion at an average price of $65,033 per Bitcoin.

Saylor, a vocal Bitcoin advocate, reinforced his commitment to BTC by embedding its symbol in Strategy’s new logo. He also shared his “21 Bitcoin rules,” emphasizing key principles for investors, such as only buying Bitcoin with funds one can afford to lose and never selling BTC.

As Bitcoin ETFs gain traction, IBIT remains a significant player, but surpassing legacy ETFs requires overcoming market challenges and broadening institutional adoption.