BlackRock’s Bitcoin ETF Rakes in More Cash Than Its S&P 500 Giant—Wait, What?

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The headline numbers

Fund Assets under management Expense ratio Est. annual fee revenue
iShares Bitcoin Trust (IBIT) $52 billion 0.25 % $187.2 million
iShares Core S&P 500 ETF (IVV) $624 billion 0.03 % $187.1 million

In the sort of plot twist that would make M. Night Shyamalan proud (or at least cause him to raise an eyebrow), BlackRock’s newest Bitcoin contraption, IBIT, is now juicing out more fee revenue than its behemoth S&P 500 ETF. That’s right: the digital upstart is coining it despite IVV being about as enormous as Texas at an all-you-can-eat buffet. Turns out, when you slap a higher fee on anything crypto-flavored, Wall Street’s finest can’t help but say, “Mmm, I’ll have what they’re having.” 🤑

How we got here

  • Launch and growth. IBIT made its debut in January 2024 as one of the first U.S.-listed spot-Bitcoin ETFs. Since then, it’s only known one direction: up. Apart from a blip so small you’d need an electron microscope to spot it, the money keeps rolling in—now at a wallet-bulging $52 billion. Somewhere, Warren Buffett just sighed audibly.
  • Pricing power. A 0.25 % fee may gasp for air next to the slim-fit expense ratios of traditional stock ETFs, but in cryptoland, people will apparently pay anything for what’s basically a digital piggy bank watched by laser-eyed security guards and a small army of compliance lawyers. Convenience tax, anyone?
  • Fee compression elsewhere. Ordinary index ETFs like IVV have been in a race to the bottom for years—think of two sumo wrestlers trying to fit through a doggy door. The fun bit: in the brave new crypto ETF world, the door is still nice and wide for those hearty “specialty” fees. That’s market maturation, folks.

Blackrock’s Bitcoin ETF out earns its IVV ETF, source: X

Macro backdrop turbo-charging demand

  1. Liquidity surge. The U.S. M2 money supply hit a chunky $21.94 trillion by May. That’s a lot of greenbacks sloshing about, hunting for somewhere—anywhere—remotely interesting to be, including the digital assets aisle, located between “High Volatility” and “Ye Olde Risk.”
  2. Fiscal alarm bells. Ray Dalio, Bridgewater boss and part-time soothsayer, thinks Washington’s “Big Beautiful Bill”—phrasing definitely not sponsored by Park Avenue—will lock the U.S. into a spend-more-than-you-earn habit. Debt’s going from eye-watering to “don’t-look-or-your-children-will-cry” territory. Bitcoin, ever the rebel asset, looks like the adult in the room. Imagine that.
  3. Seasonal tailwind. July is Bitcoin’s version of Christmas morning. Across a decade, it’s averaged a heartwarming 7 % gain for the month. This year, it entered July strutting just 3 % short of an all-time high of nearly $112k. Retail investors are spending the month with stars (and maybe dollar signs) in their eyes.

Implications for BlackRock and the market

  • Revenue density beats scale. It turns out you don’t need a financial battleship to make a decent living—sometimes a well-placed fishing boat and the right worm are all you need. IBIT is now raking in as much as IVV from a fraction of the money. BlackRock execs must be experiencing a rare mixture of glee and mild confusion.
  • Competitive pressure ahead. The moment someone like Vanguard cuts fees, the party could be over faster than you can say “basis points.” Watch out for a second coming of the ETF price war—because nothing says Wall Street like a discount.
  • Mainstreaming accelerates regulation. Grandma’s retirement plan is suddenly mingling with Bitcoin. Lawmakers may soon decide it’s time to figure out what’s actually going on—cue the regulatory clarifications, and maybe some new “fun” paperwork for ETF managers.

Investor considerations

Factor IBIT IVV
Volatility High (crypto spot price) Low-moderate (broad equities)
30-day average daily volume $2–3 billion $10 billion+
Tracking risk Minimal vs. spot BTC, but market hours mismatch persists Minimal vs. S&P 500
Fee trend Likely to compress as category matures Near rock-bottom already

IBIT is a slick, user-friendly ticket to the Bitcoin circus, but it brings the same amount of drama—price action all day, all night, and an inviting risk of regulatory curveballs. IVV, by comparison, is the sensible friend who calls a cab at midnight. Investors need to decide if they’re after thrill rides—or the reliable hum of the equity market’s grand old engine. The only sure thing: cryptocurrencies are having their moment in the sun, and, for once, it’s not just because something broke.

Bottom line: Out-earning the S&P 500 ETF isn’t just a victory for BlackRock’s accounting department—it’s a medal for investors’ growing enthusiasm for slick, no-fuss access to digital assets. And possibly a warning that humans will pay almost anything to avoid remembering a seed phrase. 🚀

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2025-07-05 03:49