BlackRock’s Bitcoin ETF Becomes a Cash Cow as IBIT Outpaces America’s Third-Largest ETF, IVV

BlackRock’s iShares Bitcoin Trust (IBIT) has turned into an unexpected revenue powerhouse, surpassing the annual fee income of IVV—BlackRock’s flagship S&P 500 ETF and the third-largest ETF in the U.S.—despite having just a fraction of its assets. The milestone highlights a dramatic shift in investor appetite toward adding Bitcoin exposure to traditional portfolios, even at a premium cost.

IBIT Generates More Revenue Than BlackRock’s Massive S&P 500 ETF

Since its launch in January last year, BlackRock’s IBIT has attracted massive inflows from both institutional and retail investors, growing to a remarkable $75 billion in assets. According to Bloomberg estimates as of July 1, IBIT’s 0.25% expense ratio brings in around $187 million in annual fees. That’s more than the $187 million earned by IVV, which tracks the S&P 500 with an asset size of $624 billion—nearly nine times larger than IBIT—but charges a minimal 0.03% fee.

IVV, launched 25 years ago, is the third-largest ETF among more than 4,300 products in the U.S., trailing only Vanguard’s and State Street’s S&P 500 ETFs. Yet in terms of revenue, IBIT has pulled ahead despite its smaller size, reflecting investors’ willingness to pay more for crypto exposure.

Investors Show Strong Willingness to Pay for Bitcoin Access

Following the U.S. regulatory approval of Bitcoin ETFs last year, capital has poured into spot Bitcoin products like IBIT, driving demand from hedge funds, pension funds, and banks. Bloomberg Intelligence notes that IBIT’s expense ratio is in line with other spot Bitcoin ETFs, but it already ranks among the top 20 ETFs in daily trading volume.

Nate Geraci, president of NovaDius Wealth Management, commented, “IBIT’s fee income surpassing IVV reflects both the explosive demand for Bitcoin exposure and the compression of fees in traditional equity ETFs. Even though Bitcoin ETF pricing is competitive, IBIT shows investors are willing to pay for exposure they see as truly additive to their portfolios.”

Paul Hickey, co-founder of Bespoke Investment Group, added, “This trend signals how eager investors are to integrate Bitcoin into their broader portfolios without needing separate crypto accounts. It also underscores Bitcoin’s dominance as a store of value, standing apart from other cryptocurrencies.”

Risk Disclaimer

Cryptocurrency investments involve significant risks. Prices can fluctuate wildly, and you could lose your entire principal. Always evaluate your risk tolerance before investing.