tl;dr
The BlackRock iShares Bitcoin Trust (IBIT) generates more annual fee revenue ($187.2 million) than BlackRock’s much larger S&P 500 ETF (IVV), despite IBIT managing only $75 billion in assets versus IVV’s $624 billion, due to its higher 0.25% expense ratio compared to IVV’s 0.03%. Since launching in ...
The BlackRock iShares Bitcoin Trust (IBIT) has reached a remarkable milestone by generating more annual fee revenue than BlackRock’s flagship S&P 500 tracker, despite being significantly smaller in size. IBIT pulls in an estimated $187.2 million annually from $75 billion in assets, charging a 0.25% expense ratio. By comparison, the BlackRock iShares Core S&P 500 ETF (IVV) earns $187.1 million from $624 billion in assets with a much lower 0.03% expense ratio. Essentially, IBIT is nearly nine times smaller but charges over eight times more in fees.
Nate Geraci, president of NovaDius Wealth Management, explains that IBIT’s revenue dominance reflects both soaring investor demand for Bitcoin and intense fee compression in traditional equity ETFs. While spot Bitcoin ETFs maintain competitive pricing, IBIT demonstrates that investors are willing to pay a premium for exposures they see as enhancing their portfolios.
Since its launch in January 2024, IBIT has attracted $52 billion out of the $54 billion total inflows into spot Bitcoin ETFs, commanding over 55% of all Bitcoin ETF assets. It has recorded inflows in 17 of its first 18 months, underscoring strong and consistent investor interest. Paul Hickey, co-founder of Bespoke Investment Group, attributes this to significant pent-up demand for Bitcoin access within diversified portfolios. He highlights Bitcoin’s leadership in the crypto market, noting its perceived value as a store of wealth has left other cryptocurrencies far behind.
The momentum continues, with IBIT not experiencing an outflow since June 6, amassing $1.47 billion in inflows over the past two weeks. Geraci aptly describes IBIT as “simply a machine” in terms of its inflow consistency and fee generation.
This week also saw activity in other crypto ETFs, as the REX-Osprey Solana Staking ETF debuted with $33 million in trading volume on day one, although this pales compared to first-day volumes of Bitcoin and Ethereum ETFs. Additionally, the SEC approved Grayscale’s move to convert its Digital Large-Cap Fund into an ETF, which will hold a basket of the top five cryptocurrencies by market capitalization, signaling continued growth and diversification within crypto exchange-traded products.