In a remarkable development within the investment landscape, the iShares Bitcoin Trust ETF (IBIT) is on the brink of reaching a significant milestone: $100 billion in assets under management (AUM). As of recent reports, the fund’s AUM stood at approximately $99.4 billion, thereby positioning it just shy of joining an exclusive club of ETFs that have crossed this notable threshold.
Since its launch on January 11, 2024, IBIT has broken multiple records, passing the $20 billion, $50 billion, and $80 billion marks in rapid succession, which has made it the fastest-growing ETF in history. Should IBIT hit the $100 billion mark, it would do so in record time, significantly outpacing the eight years it took for the Vanguard S&P 500 ETF (VOO) to achieve the same feat. Currently, only 18 U.S.-listed ETFs manage over $100 billion, emphasizing the significance of this achievement.
While its AUM saw a slight decline to $97.4 billion recently, analysts suggest it is merely a matter of time before IBIT crosses the $100 billion milestone. A comparison with other ETFs highlights its meteoric rise; BlackRock’s IBIT has effectively surpassed its main competitors.
Recent disclosures reveal that BlackRock’s IBIT now holds over 798,000 bitcoins, solidifying its position as the largest known holder of Bitcoin, even potentially exceeding the original creator Satoshi Nakamoto’s estimated holdings. Critics may point out that the funds are managed by BlackRock on behalf of numerous individual and institutional investors, yet the sheer scale of IBIT’s growth is remarkable. At present, there are 42 ETFs that invest in Bitcoin in various capacities, and IBIT dwarfs them all collectively.
The profitability of IBIT for BlackRock is equally staggering. While most ETFs typically have a low fee structure, IBIT charges 25 basis points annually, which translates into approximately $250 million in annual revenue—a significant sum within the ETF industry. During a recent earnings call, Rob Goldstein, BlackRock’s Chief Operating Officer, emphasized the firm’s ambition to provide institutional-quality access to cryptocurrencies while leveraging the convenience of the exchange-traded product (ETP) model.
IBIT stands out as the only one of the world’s largest 25 ETPs that is less than 12 years old, having achieved notable growth milestones much faster than many of its older counterparts. For context, only two ETFs of comparable size charge higher fees: Invesco’s Nasdaq-tracking QQQ and State Street’s gold ETF GLD. Both of these, however, have more complex revenue structures, leading to substantial revenues but with varying profit-sharing arrangements.
In contrast, BlackRock’s IBIT has emerged as not just a significant player in the cryptocurrency space, but a remarkably profitable venture. Interestingly, this development highlights a paradox: one of the largest beneficiaries of an innovation designed to disrupt traditional financial structures is, in fact, a well-established financial institution like BlackRock. This development underscores the evolving relationship between decentralized financial assets and traditional investment firms, showcasing a unique intersection of innovation and legacy operations in the financial ecosystem.
