- BlackRock’s Bitcoin ETF is now the fastest-growing fund, surpassing $50 billion AUM in 11 months.
- Bitcoin’s price surpasses $100K as BlackRock’s ETF attracts institutional investors and dominates the market.
BlackRock Inc’s iShares Bitcoin Trust (IBIT) has set a new standard in the exchange-traded fund (ETF) industry.
Launched in January 2024, the fund achieved $50 billion in assets under management (AUM) within 11 months.
Meanwhile, this growth has made it the fastest-growing ETF of all time, surpassing records across all asset classes, according to Bloomberg.
Blackrock Bitcoin ETF breaks records
The iShares Bitcoin Trust has reached milestones at a pace no ETF has matched before.
Todd Sohn, managing director of ETF and technical strategy at Strategas Securities, noted that IBIT’s asset size now equals the combined AUM of over 50 long-established European ETFs.
Nate Geraci, president of The ETF Store, described IBIT’s launch as “the greatest in ETF history.”
Bloomberg Intelligence analyst James Seyffart estimated that with its current AUM and a 0.25% expense ratio, the fund is projected to generate $112 million annually in revenue for BlackRock.
A boost for BTC
The launch of IBIT also marked a major shift for Bitcoin. With BlackRock’s support, Bitcoin’s [BTC] price surged past $100,000 for the first time.
The world’s largest asset manager, overseeing more than $11 trillion, brought institutional legitimacy to the cryptocurrency, attracting both traditional investors and individuals who had previously been cautious.
The road to IBIT’s launch followed years of regulatory hurdles. Efforts to secure approval for a spot-Bitcoin ETF began as far back as 2013, with repeated rejections from the Securities and Exchange Commission (SEC).
A breakthrough came in 2023 when Grayscale Investments won a federal court ruling overturning the SEC’s rejection of its Bitcoin trust conversion application.
Soon after, BlackRock entered the scene, leveraging its regulatory expertise and reputation to gain approval in early 2024.
Dominance in a competitive market
IBIT has become a leader in the crowded Bitcoin ETF market, which now holds $107 billion in assets across 12 funds. BlackRock’s offering accounts for more than half of the daily trading volume among these funds.
Since its launch, IBIT has experienced outflows on only nine days, reflecting consistent investor interest.
The fund’s introduction of options trading on the 19th of November strengthened its appeal.
Research firm Asym500 reported that IBIT’s Options have become some of the most traded among ETFs, with an average daily volume of $1.7 billion.
Competing products, including those from Fidelity and Grayscale, trail far behind, averaging just 1% of IBIT’s volume.
Vanguard’s approach
While BlackRock has embraced Bitcoin ETFs, its competitor Vanguard has stayed out of the space. Vanguard has also restricted trading of Bitcoin ETFs on its brokerage platform.
Analysts suggest this could alienate younger investors who view cryptocurrency as a core asset class.
Nate Geraci noted that this decision may give BlackRock a strategic edge,
“Younger investors are increasingly including crypto in their portfolios, and BlackRock’s move positions it as a forward-thinking leader,” he said.
As IBIT continues to grow, it has established itself as a defining player in the ongoing expansion of Bitcoin into mainstream financial markets.
