BlackRock’s iShares Bitcoin Trust (IBIT), the fund that focuses on crypto-assets, is paying off. (IBIT) has officially overtaken its long-established iShares Core S&P 500 ETF (IVV) in terms of revenue generation, according to a recent Bloomberg report.
Launched in January 2024, IBIT has quickly become one of the most successful exchange-traded funds (ETFs), as in just 6 months it has attracted over $18 billion in assets under management (AUM) and $. Better still, it clocked in revenues of $48 billion, surpassing the revenue produced by IVV, a fund with over $400 billion in AUM.
This unexpected edge in profitability also stems from the difference in fee structures between the two funds. IVV has a low expense ratio of just 0.03%, whereas IBIT charges a significantly higher 0.25% fee. This results in IBIT generating an estimated $187.2 million in annual fees, marginally surpassing IVV’s $187.1 million in revenue.
BlackRock’s unparalleled brand trust is another factor that makes traditional investors flock to the asset management company. And now, along with broader market exposure, these investors can tap into the surging demand for crypto exposure via IBIT.
This could also indicate a transformation in investor behavior. At one point, the S&P 500 was the default option for passive investing, but now, Bitcoin, via regulated financial products, is becoming a mainstream portfolio allocation. With BlackRock giving investors exposure to both, portfolio diversification becomes an imperative.