BlackRock’s Bitcoin ETF Now Outearning S&P 500 Flagship Fund

BlackRock’s iShares Bitcoin Trust (IBIT) is now generating more annual revenue than its long-standing iShares Core S&P 500 ETF (IVV), according to Bloomberg data. Despite IBIT managing just $52 billion in assets under management (AUM) compared to IVV’s massive $624 billion, the higher fee structure of the bitcoin ETF is driving greater earnings for the asset management giant.

Launched in January 2024 following U.S. regulatory approval of spot bitcoin ETFs, IBIT quickly became the largest fund of its kind, attracting consistent inflows and accumulating $52 billion in AUM. Its 0.25% management fee brings in an estimated $187.2 million in yearly revenue for BlackRock.

Meanwhile, IVV, a core fund tracking the S&P 500 index and long favored by retail and institutional investors, charges a minimal 0.03% fee. Despite managing over nine times more assets than IBIT, its annual revenue is slightly lower at around $187.1 million.

IBIT’s success underscores the growing investor appetite for regulated bitcoin exposure without the risks or complications of holding cryptocurrency directly. The fund’s appeal lies in combining crypto access with the trust and infrastructure of a traditional financial powerhouse like BlackRock.

While IBIT’s management fees are higher than typical ETFs, they reflect the additional complexities of handling a digital asset, including secure custody and compliance with evolving regulations. The rapid ascent of IBIT not only signals increasing mainstream acceptance of bitcoin but also highlights how innovative financial products can challenge even the most established funds in profitability.

As demand for crypto-backed ETFs grows, IBIT’s performance may set a precedent for future digital asset investment vehicles, redefining revenue models in the ETF space.