Bitcoin 
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BlackRock’s Bitcoin ETF is rewriting the rules of ETF profitability in 2024’s explosive crypto landscape.
Despite IVV holding nearly nine times more assets, BlackRock’s Bitcoin ETF—known as IBIT—is now the firm’s top fee generator. With over $52 billion in assets under management (AUM), IBIT is a standout in the emerging world of spot-Bitcoin ETFs.
IBIT launched in January 2024 and has since attracted strong investor interest. Except for one month, it posted steady inflows, signaling demand for easy, regulated crypto access. Its 0.25% fee may seem high compared to equity ETFs, but the market has embraced it. The cost reflects unique challenges like custody, insurance, and compliance with evolving digital asset regulations.
High fees, higher rewards
crypto ETFs like IBIT still operate in a “premium” price zone. This gives them a powerful edge in revenue per dollar of assets.
A supportive macro backdrop has also boosted IBIT. Liquidity in the U.S. financial system surged, with M2 supply hitting $21.94 trillion in May. Much of that excess cash is flowing into risk assets—including Bitcoin.
Adding fuel to the fire, Ray Dalio raised fiscal concerns after a massive federal spending package. He predicts U.S. debt will hit 130% of GDP within a decade, encouraging investors to seek “scarce assets” like Bitcoin. July, historically a strong month for crypto, also nudges more retail interest IBIT’s way.
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BlackRock’s Bitcoin ETF becomes a revenue giant
BlackRock’s Bitcoin ETF shows that storytelling matters. Even if it represents just 0.5% of the firm’s total ETF AUM, IBIT now matches IVV in total revenue. This flips conventional ETF strategy on its head: fee density, not just AUM, drives profitability.
But threats loom. If a rival fund cuts its fee to 15 basis points, IBIT’s revenue edge may narrow. Giants like Vanguard, Fidelity, and Franklin are catching up, bringing possible fee compression to crypto ETFs.
Mainstreaming Bitcoin access through retirement accounts may also drive regulatory change. New rules could reshape custody costs or tax treatment, affecting future fees.
Is now a good time to buy Bitcoin?
Bitcoin is less than 3% away from its all-time high, and July historically favors gains. For investors wondering if it’s a good time to buy, risk levels seem lower than usual. BlackRock’s Bitcoin ETF offers a secure, straightforward option to gain exposure without holding the asset directly.
