On the world’s largest asset supervisor, a Bitcoin exchange-traded fund now generates extra income than its signature tracker of the S&P 500 Index.
The roughly $75 billion iShares Bitcoin Belief ETF (ticker IBIT) has seen a torrent of money from institutional and retail buyers alike, drawing inflows in all however one of many final 18 months. With an expense ratio of 0.25%, the fund brings in an estimated $187.2 million in annual charges, based mostly on back-of-the-envelope math calculated by Bloomberg as of July 1. That barely edges out the $187.1 million made by BlackRock’s iShares Core S&P 500 ETF (IVV), which is almost 9 instances bigger at round $624 billion in belongings, and costs simply 0.03%.
“IBIT overtaking IVV in annual charge income is reflective of each the surging investor demand for Bitcoin and the numerous charge compression in core fairness publicity,” mentioned Nate Geraci, president at NovaDius Wealth Administration. “Though spot Bitcoin ETFs are priced very competitively, IBIT is proof that buyers are keen to pay up for exposures they view as really additive to their portfolios.”
BlackRock declined to remark.
Since spot Bitcoin ETFs began buying and selling in Jan. 2024, IBIT has attracted $52 billion of the mixed $54 billion in web inflows, and it holds greater than 55% of all Bitcoin ETF belongings, based on information compiled by Bloomberg. In the meantime, the 25-year-old IVV is the third-largest ETF among the many greater than 4,300 merchandise within the US, solely trailing Vanguard Group and State Avenue Funding Administration funds that additionally observe the S&P 500.
A surge of money rushed into Bitcoin ETFs after US regulators reluctantly opened the door to mainstream adoption, prompting an inflow of capital from hedge funds, pensions and banks. IBIT, which has an expense ratio just like its friends, is already a top-20 ETF by buying and selling quantity, based on Bloomberg Intelligence.
“It’s a sign of how a lot pent-up demand there was for buyers to achieve publicity to Bitcoin as a part of their total portfolio with out having to open a separate account elsewhere,” mentioned Paul Hickey, cofounder of Bespoke Funding Group. “It additionally illustrates the management of Bitcoin within the crypto area the place it’s perceived utility as a retailer of worth has basically left the others in its mud.”
Bitcoin’s supremacy over smaller altcoins has widened, with the world’s largest cryptocurrency buying and selling above $100,000, propelled by President Donald Trump’s pro-crypto stance. Wall Avenue’s shopping for spree has been led by Michael Saylor’s Technique, which has used its money to build up a mountain of Bitcoin. Hedge funds have additionally piled into the agency’s convertible debt, capitalizing on arbitrage trades that contain shopping for the bonds whereas shorting the inventory.
