BlackRock's Bitcoin ETF Surpasses Flagship S&P 500 Fund in Fee Revenue

In a landmark achievement for crypto adoption, BlackRock's iShares Bitcoin Trust (IBIT) has eclipsed its flagship S&P 500 ETF in annual fee generation despite managing significantly fewer assets. According to Bloomberg's July 2 report, the $75 billion crypto fund generates approximately $187.2 million annually with its 0.25% expense ratio, edging out the $187.1 million produced by the $624 billion iShares Core S&P 500 ETF (IVV) which carries a 0.03% ratio.

Nate Geraci, President of NovaDius Wealth Management, noted: "IBIT surpassing IVV in fee revenue demonstrates both Bitcoin's surging investor demand and the intense fee competition in traditional equity markets. Spot Bitcoin ETFs offer competitive pricing, yet IBIT proves investors willingly pay premiums for portfolio-diversifying assets."

Since its January 2024 launch, IBIT has captured $52 billion of the $54 billion total inflows into spot Bitcoin ETFs, commanding over 55% market share with consistent inflows in 17 of 18 months. Paul Hickey of Bespoke Investment Group observed: "This reflects pent-up demand for Bitcoin exposure in diversified portfolios, underscoring BTC's dominance as a store of value that outshines other cryptocurrencies."

The ETF has maintained an inflow streak since June 6, accumulating $1.47 billion over two weeks - a performance Geraci describes as "simply a machine." Meanwhile, Wednesday saw the debut of REX-Osprey's Solana staking ETF with $33 million first-day volume, while the SEC approved Grayscale's conversion of its Digital Large-Cap Fund into a top-five crypto basket ETF.