Can Bitcoin's IBIT Surpass SPY to Become the Largest ETF?

The SPDR S&P 500 ETF (SPY) has undoubtedly established itself as the most popular exchange-traded fund (ETF) globally over the past thirty years. It remains the preferred choice for investors looking to capitalize on the U.S. stock market.

On the other hand, BlackRock’s iShares Bitcoin Trust ETF (IBIT) has emerged as a formidable player in the digital asset space, allowing investors to gain exposure to the price fluctuations of Bitcoin, BTC/USD, the world's leading cryptocurrency.

Currently, the SPY ETF boasts an impressive $592 billion in assets under management (AUM), while IBIT has gathered over $45 billion. This presents a clear disparity, illustrating a classic "David vs. Goliath" scenario in the ETF landscape.

To explore whether IBIT could potentially surpass SPY in terms of AUM, we sought insights from two trending artificial intelligence chatbots, Perplexity and Grok.

Insights from Perplexity AI

Our first inquiry was directed to Perplexity AI, a popular AI-powered search tool. We asked, "Do you think BlackRock’s IBIT ETF can surpass SPY stock in AUM?" The response from the Perplexity bot indicated that it analyzed available online data, acknowledging IBIT's promising launch while recognizing SPY's established legacy.

However, the bot refrained from making definitive predictions, offering a balanced response to the speculative nature of the question. It summarized that while IBIT has displayed remarkable growth, overtaking SPY in AUM would necessitate significant and consistent inflows, along with a separation from its current market correlations. Based on present market conditions and expert opinions, the prediction was deemed unlikely for the near future.

Insights from Grok

Next, we turned to Grok, an AI assistant developed by Elon Musk's xAI. Grok provided a more detailed perspective, suggesting that it is also unlikely for IBIT to outperform SPY in the short term.

According to Grok, IBIT's growth is heavily tied to Bitcoin's price volatility and the overall interest in cryptocurrencies, which is a smaller and more speculative market compared to equities. It emphasized that SPY's AUM is ten to twelve times larger than that of IBIT, supported by the vast $50 trillion U.S. equity market.

Nevertheless, Grok acknowledged that the long-term growth potential of IBIT should not be overlooked. It suggested that with Bitcoin potentially trending towards the $150,000-$200,000 range, IBIT could realistically reach an AUM of $100 billion in the upcoming years. The conclusion drawn was that while surpassing SPY in AUM is possible, it is not expected in the immediate future.

The differing analyses highlight the increasing capabilities of AI chatbots in forecasting key trends in the stock market.

It’s also notable that leading ETF analyst Eric Balchunas previously stated that IBIT could have the potential to outperform traditional ETFs like SPY. However, he cautioned that such a shift would require a significant amount of time.

Recent Performance

In terms of performance, shares of IBIT saw a rise of 5.76%, closing at $48.14 at the market's close on Friday, according to data compiled by Benzinga Pro. Meanwhile, SPY stock gained 2.07%, finishing at $562.81. As of the latest reports, SPY stock is showing less momentum compared to IBIT.

For those interested in evaluating stocks with the highest momentum scores, it may be beneficial to explore specialized ranking tools.

Photo courtesy: Shutterstock

Bitcoin, ETF, SPY