BlackRock’s Bitcoin ETF Overtakes S&P 500 Fund in Annual Fee Revenue
NEW YORK — BlackRock reported an unprecedented milestone for its Bitcoin ETF, which now generates more annual fee revenue than its flagship S&P 500 fund.
According to Bloomberg, the iShares Bitcoin Trust (IBIT), launched in January 2024, has surpassed the earnings of BlackRock’s widely-tracked iShares Core S&P 500 ETF (IVV) despite significantly lower asset volumes.
IBIT, with approximately $70-75 billion in assets, collects nearly $187.2 million in annual fees compared to IVV’s $187.1 million, even though the latter holds $624 billion in assets.
Despite a higher expense ratio of 0.25% compared to IVV’s 0.03%, the rapid growth of IBIT demonstrates a paradigm shift in institutional investor preferences.
“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,” says Nate Geraci, president of NovaDius Wealth Management.
Market Dynamics Driving the Shift
This trend signals a pivotal moment as institutional investors increasingly prioritize Bitcoin exposure over traditional stock market access, despite cryptocurrency’s historical volatility.
Since its inception, IBIT has attracted $52-54 billion in net inflows, reaching $70 billion in Assets Under Management (AUM) and securing over 55% market share in U.S. spot Bitcoin ETFs.
“It’s an indication of how much pent-up demand there was for investors to gain exposure to Bitcoin as part of their overall portfolio without having to open a separate account somewhere else,” notes Paul Hickey, co-founder of Bespoke Investment Group.
Wall Street’s Newfound Interest
The unprecedented institutional adoption showcases how traditional financial players have integrated Bitcoin into their offerings post-approval in the U.S. marketplace.
“Bitcoin has Wall Street’s full, undivided attention now,” declared digital assets entrepreneur Anthony Pompliano on X.
“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,” Geraci adds.
Broader Implications
This shift represents a challenge to the long-standing dominance of low-cost index funds like IVV. Larry Fink, BlackRock’s CEO, previously skeptical of cryptocurrency, now describes Bitcoin as “digital gold,” positioning it as an inflation hedge.
Fink has estimated that sovereign wealth funds allocating just 2-5% to Bitcoin could potentially push the price to $700,000 per coin.
