BlackRock Inc.’s iShares unit offers more than 1,400 exchange-traded funds around the world, yet none of them have performed quite like this.
The iShares Bitcoin Trust (ticker IBIT) smashed industry records in its launch year of 2024. In just 11 months, it grew to a behemoth with more than $50 billion in assets. Simply put, no ETF has ever had a better debut.
IBIT’s size swelled to the equivalent of the combined assets under management of more than 50 European market-focused ETFs, many of which have been around for more than two decades, Todd Sohn, managing director of ETF and technical strategy at Strategas Securities, pointed out in a note.
Nate Geraci, president of advisory firm The ETF Store, called it “the greatest launch in ETF history.”
As Bloomberg Intelligence analyst James Seyffart put it: “IBIT’s growth is unprecedented. It’s the fastest ETF to reach most milestones, faster than any other ETF in any asset class,” he said. At the current asset level and an expense ratio of 0.25%, IBIT can expect to earn about $112 million a year, he added.
Yet IBIT’s success was about more than just racking up big numbers for BlackRock. It proved to be a turning point for Bitcoin itself.
With BlackRock’s more than $11 trillion in assets under management, the embrace by the world’s largest investment firm helped drive Bitcoin’s price past $100,000 for the first time, bringing both institutional investors and formerly skeptical individuals into the fold.
Road to IBIT
The path to a spot-Bitcoin ETF in the US was a long and rocky one. In 2013, the Winklevoss twins were the first to try. They filed for an ETF when Bitcoin was trading just shy of $100. However, that application faced rejection by the US Securities and Exchange Commission, as did several others over the years.
Yet digital-asset firm Grayscale Investments refused to take no for an answer, and fought the SEC in court. Eventually, it won a key victory over the regulator in 2023 when a federal appeals court overturned the rejection of its application to convert a Bitcoin trust into an ETF.
Around the same time, an elephant of the investment industry entered the room: BlackRock. Larry Fink, the firm’s chief executive officer, had once criticized Bitcoin as a tool for global money laundering.
But like many others before him in traditional finance, his view shifted and he began to see Bitcoin as “digital gold.”
Known for its flawless track record of filing and launching ETFs, BlackRock’s entrance into the spot-Bitcoin competition was taken as a sign that approval was inevitable.
Then once given the green light in January, BlackRock, along with Fidelity, VanEck, Grayscale and others, successfully launched the first U.S. cohort of ETFs that invest directly in Bitcoin. The group of 12 funds now collectively hold about $107 billion in assets.
Some industry participants said that BlackRock also gained an edge as the SEC departed from its long-standing “first come, first served” process. “By deviating from this established practice, the SEC undermined the first-mover advantage, creating an uneven playing field for issuers,” said Matthew Sigel, VanEck’s head of digital-asset research.
Early filers faced prolonged compliance hurdles and higher legal and operational costs, he said, while later entrants “benefited from an expedited but opaque process,” he added.
