BlackRock’s Bitcoin Trust Outearns S&P 500 ETF Despite Smaller Assets

BlackRock’s iShares Bitcoin Trust (IBIT) has emerged as a significant revenue generator for the asset management giant, surpassing the earnings of its flagship iShares Core S&P 500 ETF (IVV). Despite managing a substantially smaller asset base, IBIT’s higher fee structure has enabled it to outperform IVV in terms of annual revenue.

IBIT, which launched in January 2024, has amassed $52 billion in assets under management (AUM). This growth is attributed to its higher fee structure, which stands at 0.25%, allowing it to generate approximately $187.2 million in annual fees. In contrast, IVV, which tracks the S&P 500 index and has been a staple in many portfolios, charges a much lower fee of 0.03%. Despite managing $624 billion in AUM, IVV generates around $187.1 million in annual fees, slightly less than IBIT.

The success of IBIT underscores the growing demand for regulated bitcoin investment products, particularly those offered by established financial firms. Investors are drawn to these products as they provide exposure to bitcoin without the complexities and security risks associated with holding the asset directly. The higher fee structure of IBIT reflects the additional complexities, custody requirements, and regulatory considerations involved in offering exposure to a digital asset like bitcoin.

IBIT’s rapid growth and revenue generation highlight the shifting landscape of investment products. The fund has seen consistent inflows since its launch, making it the largest spot bitcoin ETF on the market. This trend suggests that investors are increasingly looking for ways to incorporate digital assets into their portfolios through regulated and managed products.