Spot Bitcoin ETF (IBIT) Tops $10 Billion in AUM

BlackRock's iShares Bitcoin ETF IBIT set a new benchmark in the ETF industry by reaching $10 billion in assets under management (AUM) on Mar 1, just seven weeks after its launch on Jan 11. This made it the fastest ETF to achieve this milestone. IBIT now stands as the premier spot Bitcoin trading vehicle.

This milestone not only underscores the growing investor confidence in digital assets but also marks a significant moment in the maturation of the cryptocurrency market as a legitimate and viable investment sector. The achievement surpasses the record previously held by SPDR Gold Shares GLD, which took over two years after its 2004 launch to reach the $10 billion AUM mark.

Behind the Success

This rapid growth was bolstered by a record-breaking week of trading and inflows among a group of 10 trading spot bitcoin ETFs, with IBIT alone witnessing inflows of $604 million on Feb 29, closely following a single-day record of $612 million the previous day. According to Bloomberg Intelligence, more than three-quarters of IBIT's AUM originated from investment inflows, with the remainder attributed to price appreciation. Notably, iShares Bitcoin Trust raked in $4.5 billion in capital in February (read: 5 ETFs That Gained Investors Love in February).

Several factors contribute to the growing allure of IBIT. First, it offers a secure and regulated investment vehicle for those looking to gain exposure to Bitcoin, addressing concerns around security, custody and regulatory compliance that can deter direct investment in cryptocurrencies. Secondly, the ETF makes Bitcoin accessible to a broader range of investors, including those who may be new to the cryptocurrency space or prefer investing through traditional financial instruments.

Spot Bitcoin ETFs are considered to be a game changer for cryptocurrency investors and the surge in ETF inflows signals a growing trend of institutional investment in Bitcoin.

Amid the strong demand for spot bitcoin ETFs, the world's largest cryptocurrency is experiencing an unstoppable rally this year. Bitcoin touched an all-time high of $69,000 on Mar 5 before dipping below $64,000. At its new high, the cryptocurrency was up about 63% in 2024, outperforming global stocks and spreading optimism across the digital-asset market.

The solid rally in the token and ETFs appeal is likely to continue, given its upcoming “halving” event in April. Halving, which reduces the reward for mining new blocks, has historically been seen as a catalyst for Bitcoin's price. With Bitcoin's unique position in the digital currency space, many remain bullish on its future, forecasting it to breach the $100,000 mark before year-end (read: Bitcoin on an Unstoppable Rally: 5 Sizzling Hot ETFs).

IBIT in Focus

iShares Bitcoin Trust seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. However, the fee is set to be 0.12% for the first 12 months or on the first $5 billion in assets.

IBIT is closely followed by Fidelity’s Wise Origin Bitcoin Fund FBTC, which has about $6.6 billion in assets.

Bottom Line

The IBIT ETF surpassing $10 billion in AUM is a turning point for the cryptocurrency investment landscape. It reflects growing investor confidence, the maturation of the market and the increasing acceptance of digital assets within the traditional financial ecosystem. As the market continues to evolve, the IBIT Bitcoin ETF's success may well be seen as a critical milestone in the broader integration of cryptocurrencies into the global investment portfolio.

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SPDR Gold Shares (GLD): ETF Research Reports

iShares Bitcoin Trust (IBIT): ETF Research Reports

Fidelity Wise Origin Bitcoin Fund (FBTC): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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