Bitcoin News Today: IBIT Bridges TradFi and Crypto, Storming $90B AUM Mark

BlackRock's iShares Bitcoin Trust (IBIT) has surged to prominence in the cryptocurrency market, recording over $1 billion in net inflows during the "Uptober" rally as Bitcoin (BTC) and Ethereum (ETH) prices climbed to multi-month highs. The ETF, launched in January 2024, now holds nearly $90.7 billion in assets under management (AUM), surpassing the Technology Select Sector SPDR Fund (XLK) to enter the top 20 U.S. ETFs by sizeThe Block, ^[1]. This growth has been driven by a confluence of institutional demand, regulatory clarity, and a broader macroeconomic environment favoring risk-on assets.

The ETF's performance has been particularly notable in October, with a single-day inflow of $466.5 million on October 2 aloneThe Coinrise, ^[2]. This follows a four-day streak of inflows totaling $2.25 billion across U.S. Bitcoin ETFs, pushing cumulative inflows since inception to nearly $60 billionCoinDesk, ^[3]. IBIT accounted for $4.3 billion of the $5.6 billion in total Bitcoin ETF trading volume on October 2, placing it among the top 10 most-traded ETFs in the U.S., alongside SPY and QQQThe Market Periodical, ^[4]. The surge in demand coincides with Bitcoin's price breaking above $120,000 for the first time since August, a level last seen before the U.S. government shutdown.

A pivotal shift has occurred in the Bitcoin options market, with IBIT overtaking Deribit as the largest venue for Bitcoin options open interest. Data from Bloomberg and Deribit show that open interest in IBIT options contracts reached $38 billion, surpassing Deribit's $32 billionCoinJournal, ^[5]. This marks a structural shift in liquidity dynamics, as institutional capital increasingly flows into regulated markets. Deribit, acquired by Coinbase for $2.9 billion earlier this year, had dominated Bitcoin derivatives since 2016. Analysts attribute the shift to IBIT's role in bridging traditional finance (TradFi) and crypto, offering a regulated, liquid vehicle for institutional exposureBloomberg, ^[6].

The ETF's growth has also been amplified by its impact on derivatives markets. IBIT's leverage ratio has reached 45%, with nearly half of its $770,000 BTC holdings mirrored in options derivativesThe Block, ^[7]. This concentration of speculative positioning underscores the ETF's role in reshaping Bitcoin's risk profile. Meanwhile, Ethereum ETFs have mirrored the trend, with BlackRock's ETHA attracting $485 million in inflows over four days, contributing to a $1.04 billion weekly inflow for U.S. Ethereum ETFsTradingNEWS, ^[8].

Market analysts highlight the interplay between macroeconomic factors and ETF-driven demand. The Federal Reserve's easing bias, reflected in near-100% odds of a 25-basis-point rate cut in October, has spurred a "debasement trade" in hard assets like Bitcoin and goldJPMorgan, ^[9]. Institutional investors are increasingly allocating to Bitcoin as both a hedge against inflation and a growth asset, with JPMorgan noting a broad tilt toward hard assets in portfolio strategiesThe Block, ^[10]. The Uptober rally has also been bolstered by short liquidations, with Bitcoin's price surging past $120,000 amid a $700 million short squeeze in global crypto marketsTradingNEWS, ^[11].

Looking ahead, the ETF's trajectory remains closely tied to Bitcoin's price action and regulatory developments. Citigroup forecasts Bitcoin at $133,000 by year-end and $181,000 by 2026, driven by ETF flows and institutional adoptionCiti, ^[12]. However, challenges persist, including the U.S. government shutdown, which has delayed approvals for altcoin ETFs like those for Solana and XRPCryptopolitan, ^[13]. Despite these hurdles, the IBIT's ascent signals a maturing integration of crypto into traditional markets, with liquidity and volatility patterns increasingly influenced by institutional participationCoinDesk, ^[14].