BlackRocks Bitcoin ETF IBIT Outearns S&P 500 ETF IVV by $100,000 Annually

BlackRock, the world’s largest asset manager, has achieved a significant milestone that underscores Bitcoin’s growing mainstream acceptance: its spot Bitcoin exchange-traded fund (IBIT) is now generating more annual fee revenue than its flagship iShares Core S&P 500 ETF (IVV).

According to a new report, the IBIT, launched in January 2024, now generates $187.2 million in annual fees, surpassing IVV by approximately $100,000. This is despite the S&P 500 fund being over eight times larger in total assets. This disparity highlights the intense investor demand for Bitcoin and the significant fee compression in core equity exposure.

NovaDius Wealth Management president Nate Geraci commented on this shift, noting that IBIT overtaking IVV in annual fee revenue reflects both the surging investor demand for Bitcoin and the significant fee compression in core equity exposure. IBIT charges an expense ratio of 0.25% on approximately $75 billion in assets under management, while IVV, with around $624 billion in assets under management, charges just 0.03%. This contrast illustrates how investors’ appetite for Bitcoin exposure is generating outsized revenue, despite the Bitcoin ETF’s smaller asset base.

Industry leaders have also weighed in on this shift. Anthony Pompliano, a noted crypto entrepreneur, wrote that “Bitcoin has Wall Street’s full, undivided attention now.” Ben Pham, CFO of Strive Funds, declared that Bitcoin could become “the death of active management and passive indexation portfolios.” Crypto trader Cade O’Neill added, “It says everything about where capital is headed. Institutions aren’t just curious anymore, they’re committed.” Meanwhile, James McKay of McKay Research called the report “bullish” and “probably something.”

Since its debut, BlackRock’s IBIT has attracted a staggering $52.4 billion in inflows, the highest of any U.S. spot Bitcoin ETF. This influx of capital into IBIT underscores the growing institutional interest in Bitcoin and cryptocurrency investments. The success of IBIT suggests a potential trend towards increased adoption and investment in crypto-based financial products, which could reshape the dynamics of the investment market.