BlackRock’s (BLK) iShares Bitcoin Trust (IBIT) is now generating more revenue for the asset manager than its signature fund that tracks the benchmark S&P 500 index.
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Market data shows that the iShares Core S&P 500 ETF (IVV) is trailing the Bitcoin ETF in terms of money generated. While the Bitcoin funds $52 billion in assets under management (AUM) trails the S&P 500 ETF’s $624 billion in total assets, the higher fee structure for the Bitcoin fund has turned it into a cash cow for BlackRock.
The IBIT Bitcoin ETF now brings in $187.2 million annually for BlackRock through its 0.25% management fee, while the IVV S&P 500 ETF earns $187.1 million from the 0.03% fee that it charges. The revenue generation is impressive when one considers that the Bitcoin fund only launched in January 2024.
Big Growth
Since its launch, BlackRock’s Bitcoin fund has seen inflows every month except one, amassing $52 billion in assets to date. That makes it the largest spot Bitcoin ETF on the market today. The rapid growth of the IBIT fund highlights the strong demand and big growth for regulated crypto investment products, say analysts.
Investors say they like gaining exposure to Bitcoin and other cryptocurrencies without the technical hurdles or security involved in holding the physical asset directly. Although IBIT’s management fee is higher than more traditional ETFs, BlackRock says it reflects the added complexity, custody and regulatory requirements involved in offering exposure to cryptocurrencies such as Bitcoin.
Is BLK Stock a Buy?
The stock of BlackRock has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 12 Buy and two Hold recommendations issued in the last three months. The average BLK price target of $1,062.86 implies 0.72% downside from current levels.
