IBIT vs FBTC: BlackRock's ETF Dominance in Bitcoin Spot Market

The financial industry has seen the emergence of two Bitcoin ETFs: IBIT and FBTC. Both funds launched on January 11, 2024, but they have distinct operational differences that set them apart.

One key difference lies in their custodial arrangements. BlackRock's IBIT uses Coinbase Custody to hold its Bitcoin, while Fidelity's FBTC employs self-custody through Fidelity Digital Assets. This distinction matters for investors who worry about a single point of failure at a third-party custodian like Coinbase.

In terms of asset size, IBIT has a massive $76 billion in assets, resulting in tight bid-ask spreads for large positions. In contrast, FBTC manages $18 billion in assets and is more geared towards retail investors through the Fidelity brand.