BlackRock’s IBIT Is Nearing $100B in AUM. Everyone Else Might Be Chasing ‘Crumbs’

The world’s fastest-growing ETF, the iShares Bitcoin Trust (IBIT), is nearing $100 billion in assets, less than two years after its launch.

That puts it among the 20 biggest ETFs, only 18 of which are in the $100 billion-plus club. It clearly shows demand for digital assets, or at least for one product. BlackRock dominates the crypto ETF category, with the next-biggest competitor, Fidelity’s Wise Origin (FBTC), being roughly a quarter of the size. Of course, BlackRock is also the world’s biggest asset manager, at about $12.5 trillion, according to the Sovereign Wealth Fund Institute. The firm, which also manages the fourth-biggest crypto ETF, the $18 billion iShares Ethereum Trust, hasn’t shown any plans to expand into other digital assets. BlackRock declined to comment, but it has not been among the issuers filing for spot-price ETFs in XRP, Solana or other categories.

“The ETF game belonged to BlackRock long before crypto ETFs,” said Tyrone Ross, CEO of 401 Financial and Turnqey Labs. “Everyone else gets the crumbs, and because the market opportunity is so big, other providers can accumulate meaningful AUM with those crumbs.”

Profitable? Um, Just IBIT

The iShares ETF, which charges 0.25%, brings in revenue of about $240 million for BlackRock, Bloomberg analysts noted, making it the most profitable fund for the company. There’s a big incentive for companies to add spot-price crypto ETFs, though the Securities and Exchange Commission until recently was slow to approve many. That changed last month, when the regulator gave exemptions to the three big exchanges to use generic listing standards. The effect will be numerous new digital asset ETFs coming to market without a la carte approval by the SEC. Whether there’s investor appetite for numerous versions of Dogecoin is another matter.

“Other crypto tokens don’t have the same global adoption or characteristics that make Bitcoin such a strong store of value,” said Mike Casey, president of AE Advisors, who has been recommending Bitcoin allocations since 2019. “The spot ETFs are a frictionless way to add Bitcoin exposure for clients.” While IBIT has the most liquidity and largest market cap, he said the Grayscale Bitcoin Mini Trust (BTC), Bitwise Bitcoin ETF (BITB) and ARK 21Shares Bitcoin ETF (ARKB) are also worth a look.

Some of the recent developments in crypto ETFs:

• BlackRock filed for an iShares Bitcoin Premium Income ETF.
• Rex-Osprey has two ETFs with staking capabilities (SSK and ESK).
• S&P Global is adding a Digital Markets 50 Index, tracking both equities and digital assets. Dinari, which partnered with S&P, is making a token specific to that index.

Let them eat crumb cake: There are billions of dollars in investments at stake, so expect a deluge of ETFs soon, even if only a small slice gain enough assets to survive. “The door is wide open now for other types of crypto ETFs,” Ross said. “It will be interesting to see how Solana is received and whatever comes after, like a Chainlink, Ripple or Litecoin.”