BlackRock Inc’s iShares Bitcoin Trust (IBIT) has set a new benchmark in the world of exchange-traded funds (ETFs).
Introduced in January 2024, the fund swiftly amassed $50 billion in assets under management (AUM) in just 11 months.
This rapid growth has positioned IBIT as the fastest-growing ETF to date, surpassing records across all asset categories, as per reports from Bloomberg.
BlackRock Bitcoin ETF Shatters Records
The iShares Bitcoin Trust has achieved milestones at an unprecedented pace, outperforming any other ETF in history.
Todd Sohn, the managing director of ETF and technical strategy at Strategas Securities, mentioned that IBIT’s asset value now matches the combined AUM of more than 50 well-established ETFs in Europe.
Commenting on IBIT’s launch, Nate Geraci, the president of The ETF Store, hailed it as “the most remarkable event in the ETF world.”
Analyst James Seyffart from Bloomberg Intelligence estimated that based on its current AUM and a 0.25% expense ratio, the fund is expected to generate $112 million in revenue annually for BlackRock.
A Positive Development for Bitcoin
The introduction of IBIT marked a significant turning point for Bitcoin as the digital currency surged past the $100,000 mark for the first time with BlackRock’s backing.
As the world’s largest asset manager overseeing a portfolio exceeding $11 trillion, BlackRock’s endorsement lent institutional credibility to Bitcoin, attracting interest from both conventional investors and individuals who were previously cautious.
The journey to the launch of IBIT was characterized by years of navigating regulatory challenges, starting back in 2013 with unsuccessful attempts to secure approval for a spot-Bitcoin ETF from the Securities and Exchange Commission (SEC).
A breakthrough came in 2023 following a federal court ruling in favor of Grayscale Investments, overturning the SEC’s rejection of its Bitcoin trust conversion application.
Subsequently, BlackRock, leveraging its regulatory know-how and reputation, obtained approval in early 2024.
Establishing Dominance in a Competitive Market
Amid a crowded Bitcoin ETF market with total assets of $107 billion spread across 12 funds, IBIT has emerged as a frontrunner, accounting for more than half of the daily trading volume among these funds.
Since its launch, IBIT has experienced outflows on only nine days, signaling sustained investor interest.
The introduction of options trading on November 19th further enhanced the fund’s appeal.
As per Asym500 research, IBIT’s options have become some of the most actively traded among ETFs, boasting an average daily volume of $1.7 billion.
Rival offerings from Fidelity and Grayscale lag significantly, averaging just 1% of IBIT’s trading volume.
Vanguard’s Stance
Unlike BlackRock’s enthusiastic adoption of Bitcoin ETFs, its competitor Vanguard has refrained from entering this arena and even restricted trading of Bitcoin ETFs on its brokerage platform.
Analysts speculate that this decision could alienate younger investors who consider cryptocurrency a fundamental asset class.
Nate Geraci suggested that this stance might give BlackRock a strategic advantage,
“Younger investors are increasingly diversifying their portfolios with cryptocurrencies, positioning BlackRock as a forward-thinking industry leader,” he remarked.
As IBIT continues its expansion, it solidifies its position as a key player in integrating Bitcoin into the mainstream financial landscape.