BlackRock’s iShares Bitcoin Trust (IBIT) has set new benchmarks in the ETF market, according to a Bloomberg report.
Launched in January 2024, the fund attracted over $50 billion in assets within 11 months, the fastest growth ever recorded in the industry. Bloomberg Intelligence analyst James Seyffart commented,
“IBIT’s growth is unprecedented. It’s the fastest ETF to reach most milestones, faster than any other ETF in any asset class.”
“IBIT’s growth is unprecedented. It’s the fastest ETF to reach most milestones, faster than any other ETF in any asset class.” –@JSeyff Nice look at how it all came together for IBIT, incl some color from yours truly.What a headline.via @sidcoins https://t.co/znv5KBNTnk pic.twitter.com/SJ1GXG1RFM
— Nate Geraci (@NateGeraci) December 31, 2024
With its current size and a 0.25% expense ratio, the fund is estimated to generate $112 million annually. IBIT has already surpassed most long-standing ETFs and now manages more assets than BlackRock’s gold-focused ETF, the second-largest gold fund globally.
Analysts predict that IBIT could even overtake SPDR Gold Shares, the largest gold ETF, in 2025, provided Bitcoin’s price maintains its current momentum.
Driving Bitcoin’s Mainstream Adoption
The launch of IBIT has been a turning point for Bitcoin, helping push its price above $100,000 for the first time. BlackRock’s involvement, as the world’s largest asset manager with over $11 trillion under management, has driven institutional and retail interest in Bitcoin.
BlackRock CEO Larry Fink, who once criticized Bitcoin, has since referred to it as “digital gold,” reflecting a broader acceptance of cryptocurrencies in traditional finance.
The introduction of IBIT followed years of efforts by firms like Grayscale Investments and the Winklevoss twins to bring Bitcoin ETFs to the U.S. market. Despite facing multiple rejections by the SEC, Grayscale secured a legal victory in 2023, which paved the way for BlackRock and other firms to launch spot-Bitcoin ETFs.
Currently, 12 such funds manage a combined $107 billion in assets, with IBIT accounting for nearly half of the total.
Market Leadership and Innovation
IBIT has quickly become a leader among Bitcoin ETFs, dominating trading activity in the space. The fund accounts for over 50% of the daily trading volume across all spot-Bitcoin ETFs and has experienced outflows on only nine days since its inception.
The ETF was also the first in its category to introduce options trading. These options now average $1.7 billion in daily trading volume, significantly ahead of competitors such as Fidelity and Grayscale. Research firm Asym500 noted that IBIT is among only 13 ETFs in the U.S. that regularly see more than $1 billion in daily options trading, further solidifying its position in the market.
Competition and the Path Ahead
While BlackRock has embraced crypto investments, Vanguard has opted to avoid the space altogether. Vanguard has neither launched a Bitcoin ETF nor allowed clients to trade such funds on its platform. Analysts believe this approach may create challenges for Vanguard, especially as younger investors increasingly view cryptocurrency as a standard portfolio component.
“The absence of a Bitcoin ETF could lead Vanguard to miss out on a growing segment of investors,” said Nate Geraci, president of The ETF Store.
BlackRock’s success with IBIT continues to drive Bitcoin adoption and reshape the investment landscape, raising questions about how competitors will adapt in the years ahead.
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