BlackRock’s High-Cost Crypto ETFs Outperform Traditional Funds Amid Frenzied Demand

BlackRock’s Bitcoin and Ethereum exchange-traded funds (ETFs) have generated over $260 million in revenue within two years, establishing themselves as the firm’s most profitable products. The iShares Bitcoin Trust (IBIT) alone contributed $218 million in its first year, while the Ethereum-focused ETHA fund added $42 million, according to Omar Kanji of Dragonfly. This rapid growth underscores BlackRock’s dominance in the digital asset space, with the ETFs commanding significant market share and attracting over $100 billion in combined assetsBlackRock’s Crypto ETFs Revenue Surpass $260 Million Annually^[1].

The success of these funds is driven by a 0.25% fee structure, which is notably higher than the 0.03%–0.1% rates for most of BlackRock’s traditional ETFs, including its flagship iShares Core S&P 500 ETF (IVV). Despite managing assets nearly nine times smaller than IVV, IBIT’s higher fee rate generated $187.2 million in annual fees as of July 2025, surpassing IVV’s $187.1 million. This reflects strong institutional and retail demand for crypto exposure, with investors willing to pay premiums for Bitcoin and Ethereum despite the elevated costsBlackRock Bitcoin ETF drives more revenue than its …^[2].

Market dynamics further highlight the ETFs’ influence. IBIT, launched in January 2024, has attracted $60.6 billion in net inflows, representing 73% of all U.S. Bitcoin ETF flows and securing its position as the 22nd largest ETF globally by assets. Meanwhile, ETHA, debuted in July 2024, has drawn $13.4 billion in inflows, capturing 72.5% of U.S. Ethereum ETF flows. These figures illustrate the growing institutional confidence in crypto, with BlackRock’s ETFs acting as primary conduits for capital into the asset classBlackRock’s Crypto ETFs Revenue Surpass $260 Million Annually^[1].

BlackRock’s crypto ETFs have also reshaped its broader business strategy. The funds accounted for 16.5% of all ETF inflows at the firm in the second quarter of 2025, up from less than 3% in the prior quarter. Digital asset fees rose to $40 million during the period, a 18% increase from Q1. CEO Larry Fink attributed this growth to the firm’s expansion into private markets, crypto, and data-driven strategies, alongside new global partnerships such as Jio BlackRock in IndiaBlackRock Hits Record $12.5 Trillion AUM as Crypto ETFs Explode^[3].

Analysts note that BlackRock’s ETFs have amplified Bitcoin’s supply dynamics. For instance, ETF and corporate treasury purchases of Bitcoin in 2025 reached $28.22 billion, far outpacing miner issuance of $7.85 billion. This imbalance has reinforced Bitcoin’s scarcity narrative, with BlackRock’s IBIT alone holding over 700,000 BTC as of July 2025. The firm’s success has also spurred speculation about future crypto ETF approvals, with Bloomberg analysts assigning 90–95% odds for spot ETFs for Solana, XRP, and Litecoin by year-endBlackRock’s Tokenized ETFs Explained: Everything You …^[4].