The clearest difference between GBTC and IBIT is the fee: Grayscale’s Bitcoin Trust charges 1.50% a year, BlackRock’s iShares Bitcoin Trust charges 0.25%, a gap reported by CoinFeeds, BTC ETF Calc, Mezzi, Swan Bitcoin and Spark Money. The less obvious difference is structural — GBTC spent a decade as a closed-end trust with no way to redeem shares for the underlying Bitcoin, while IBIT was built as an ETF from the start, and the evidence on how each fund’s redemption mechanism works today does not agree.
The fee gap, in dollars
BTC ETF Calc’s fee calculator puts a number on the gap: on a $50,000 position, GBTC’s 1.50% fee costs $750 a year against $125 for IBIT, according to BTC ETF Calc, which is undated. Run out five years and the same calculator shows IBIT saving an investor $603 in fees relative to GBTC — a figure Mezzi also arrives at independently, citing the same $50,000 example and the same five-year, $603 savings estimate, with its underlying data dated February 20, 2026 and the article published July 2, 2026. Two separate write-ups landing on the same number is the closest thing to confirmation in this evidence set.
According to BTC ETF Calc’s own FAQ, undated, GBTC’s fee was originally 2% when it operated as a closed-end trust; Grayscale lowered it to 1.50% at the ETF conversion but kept it well above rivals. Spark Money, describing its comparison table as reflecting data current to March 2026, adds a further data point: it estimates GBTC still generates roughly $223 million a year in fee revenue, more than every other spot Bitcoin ETF combined, despite the fund’s outflows.
Why GBTC’s history matters here
GBTC began trading privately with accredited investors in 2013 and later moved to over-the-counter public trading, according to CoinFeeds, which is undated. In 2017 Grayscale applied for ETF status, was denied by the SEC, and the trust crossed $1 billion in assets under management that same year, per CoinFeeds. Grayscale sued, and CoinFeeds reports that the DC Circuit Court ruled in Grayscale’s favor and asked the SEC to uplift GBTC to a spot Bitcoin ETF. The SEC approved 11 spot Bitcoin ETFs on January 10, 2024, per CoinFeeds; trading began the next day, January 11, according to Spark Money and BTC ETF Calc’s launch-date table. GBTC converted from trust to ETF on that date rather than launching fresh, according to Mezzi and BTC ETF Calc.
Before that conversion, Grayscale could not offer share redemption “during the early periods,” unlike BlackRock’s iShares structure, according to CoinFeeds. The lack of a redemption mechanism is why GBTC’s share price could drift away from the value of the Bitcoin it actually held — trading at a premium or a discount to net asset value, a pattern described by Swan Bitcoin in an article dated June 30, 2024. Since conversion, Mezzi reports that as of February 20, 2026 the gap between GBTC’s price and its net asset value had narrowed to around 0.02%, which it attributes to the creation-and-redemption mechanism that ETF status introduced.
What creation and redemption actually do
According to Bitcoin.com News, an authorized participant is generally a bank or trading firm with the licence to deal directly with a fund’s issuer, creating new shares or redeeming existing ones. It can create new ETF shares by delivering assets to the fund, or redeem shares by handing them back in exchange for assets. When that exchange happens in Bitcoin itself rather than in dollars, it is called in-kind creation or redemption. Bitcoin.com News explains that this lets an authorized participant hand over actual Bitcoin and receive IBIT shares directly, instead of settling in cash. The more participants who can do this, the faster any gap between the ETF’s share price and Bitcoin’s spot price tends to close, because arbitrage corrects the mispricing — a mechanism Bitcoin.com News lays out in its report.
The contradiction this page cannot resolve
Here the two sources disagree outright. Spark Money’s comparison table, describing data as of March 2026, states plainly that none of the spot Bitcoin ETFs — its count runs to 12 funds including IBIT and GBTC — allow in-kind creation and redemption, and that every authorized-participant transaction settles in cash. Bitcoin.com News, in a report dated August 11, 2026, says the opposite for IBIT specifically: BlackRock’s head of digital assets, Robbie Mitchnick, confirmed on Bloomberg Television that the fund’s in-kind conversion minimum had just been cut from $25 million to $1 million. Mitchnick is quoted saying, “It used to be $25 million,” and BlackRock has said it wants to eventually make the mechanism available “at any transaction size,” per the same report.
One possible reconciliation, offered here as analysis rather than as a confirmed fact: Bitcoin.com News reports that regulators cleared BlackRock and other issuers to offer in-kind conversion only earlier in 2026, which would postdate Spark Money’s March 2026 snapshot. Neither outlet references the other’s claim, so that timeline cannot be verified from this evidence. What can be said is that a reader trying to determine, today, whether IBIT settles creations and redemptions in cash or in Bitcoin will find two credible-looking sources saying different things, and neither is a regulatory filing or the fund’s own prospectus.
The distinction is not academic. Bitcoin.com News notes that in-kind conversion lets an institution that already holds Bitcoin move into IBIT shares without first selling that Bitcoin for cash — avoiding a taxable sale that a cash-settled transaction would likely trigger. If Spark Money is right that no cash-free path exists, that tax advantage would not be available to anyone through the ETF mechanism itself.
The tax trap, and Grayscale’s workaround
For long-time GBTC holders, the fee gap and the redemption question both run into a third problem: tax. BTC ETF Calc lays out an illustrative example, described as hypothetical: an investor who bought GBTC at $10 a share and now sees it trading at $60 would owe capital-gains tax on a $50-per-share gain if they sold to move into a cheaper fund. Both BTC ETF Calc and Mezzi describe this as the reason GBTC has kept assets despite its fee — not because holders prefer it, but because leaving is expensive.
Grayscale’s response was the Bitcoin Mini Trust, ticker BTC, which charges 0.15% and was distributed to existing GBTC holders without forcing a sale, according to BTC ETF Calc, Mezzi and Spark Money. Spark Money dates the Mini Trust’s launch to July 31, 2024, seeded with roughly 10% of GBTC’s Bitcoin holdings.
AUM and outflows: the numbers don’t agree
Every figure below is self-reported by the outlet that published it, drawn from different dates, and none derives from an SEC filing or the funds’ own reserve pages held in this evidence set.
Outlet As-of date GBTC AUM IBIT AUM / holdings CoinFeeds undated (“as of this writing”) $6.97 billion $15.49 billion (dated only “March 27th”; year not stated) Swan Bitcoin July 26, 2024 $16.93 billion 338,127 BTC held (no dollar figure given) Mezzi February 20, 2026 $11 billion (about 158,000 BTC) $51.17 billion (about 756,177 BTC) Spark Money March 2026 $14.9 billion $70.6 billion (about 77% of total spot Bitcoin ETF assets)
On outflows, CoinFeeds reports GBTC’s cumulative outflows since conversion had surpassed $14 billion, undated, citing data from Farside; Bitcoin.com News, dated August 11, 2026, puts the cumulative figure at roughly $27.47 billion. These are not the same measurement and should not be averaged or treated as updates of one another — they are separate outlets counting at separate points nearly two years apart. On the inflow side, Bitcoin.com News reports IBIT captured $479 million over a three-day stretch in early August 2026, about 76% of total spot Bitcoin ETF inflows in that window, as spot Bitcoin ETFs together logged more than $750 million for the week while Bitcoin’s price wobbled below $65,000. Spark Money separately credits IBIT with $62.88 billion in cumulative net inflows since its January 2024 launch, as of March 2026, and says the category as a whole pulled in more than $56 billion in its first year of trading.
What this page does not tell you
No SEC filing, fund prospectus, or issuer reserves page was reviewed to write this page. Every fee, AUM and outflow figure above traces to a secondary write-up — some financial newsrooms, some comparison tools — and none of them share a common as-of date, so none of the AUM figures can be reconciled into a single current number.
This page cannot tell you, as of today, whether IBIT settles creations and redemptions in cash only or offers in-kind conversion, because Spark Money and Bitcoin.com News say opposite things and neither is a primary document. Anyone who needs a definitive answer on that point should check BlackRock’s own prospectus or authorized-participant agreement rather than either source used here.
It also cannot tell you what GBTC’s or IBIT’s AUM, holdings or fee terms are right now. The most recent figures cited — Bitcoin.com News’s August 11, 2026 report and Spark Money’s March 2026 table — are themselves already dated by the time this page is read, and fee waivers, minimums and redemption terms have changed before, per the sources cited above.
Finally, none of this is tax advice. The worked example of a $50-per-share taxable gain is BTC ETF Calc’s own hypothetical, not a case history, and BTC ETF Calc itself notes that IRS guidance on some aspects of Bitcoin ETF taxation, including wash-sale treatment, remains unsettled.
Sources
Every fact above is attributed to one of these reports. Where they disagree, the article says so.
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