BlackRock's Bitcoin Trust Outearns S&P 500 Tracker With 0.25% Fee

BlackRock's iShares Bitcoin Trust (IBIT) has achieved a significant milestone by generating more annual fee revenue than the firm’s flagship S&P 500 tracker, despite being much smaller in size. The crypto fund generates an estimated $187.2 million in annual fees from its $75 billion in assets with a 0.25% expense ratio. In contrast, the BlackRock iShares Core S&P 500 ETF (IVV) makes $187.1 million from $624 billion in assets and a 0.03% expense ratio. IBIT is nearly nine times smaller but charges over eight times more in fees.

Nate Geraci, president at NovaDius Wealth Management, commented that “IBIT overtaking IVV in annual fee revenue is reflective of both the surging investor demand for Bitcoin and the significant fee compression in core equity exposure.” He further noted that “Although spot Bitcoin ETFs are priced very competitively, IBIT is proof that investors are willing to pay up for exposures they view as truly additive to their portfolios.”

Since launching in January 2024, IBIT has captured $52 billion of the $54 billion in total spot Bitcoin ETF inflows and holds over 55% of all Bitcoin ETF assets. The fund has also seen inflows in 17 of its first 18 months. Paul Hickey, co-founder of Bespoke Investment Group, stated that this indicates a significant “pent-up demand” for investors to gain exposure to Bitcoin as part of their overall portfolio. He added that “It also illustrates the leadership of Bitcoin in the crypto space where its perceived utility as a store of value has essentially left the others in its dust.”

The BlackRock fund has not seen an outflow day since June 6 and has had $1.47 billion in inflows over the past fortnight. Geraci described it as “simply a machine.”