BlackRock’s IBIT ETF Surpasses $2B in Bitcoin Market Cap

BlackRock’s Bitcoin exchange-traded fund (ETF) has quickly gained popularity, amassing $2 billion in assets under management (AUM) within just two weeks of its launch on the Nasdaq. This impressive growth has been driven by Bitcoin’s price performance, which has propelled the fund’s market capitalization to $2.11 billion. After a recent dip in price following the launch of ETFs on January 11, Bitcoin has now surged past the $42,000 mark, reaching its highest level in nearly a week.

Assets under management refer to the total value of financial assets held by a fund on behalf of its clients. BlackRock’s iShares Bitcoin Trust (IBIT) is currently leading the competition for investor capital, surpassing Fidelity’s Wise Origin Bitcoin Fund (FBTC) which has seen $1.8 billion in flows over the past ten days. BlackRock, being the largest asset manager globally, is leveraging its strong reputation to attract a wider audience to its cryptocurrency-based product.

Unlike other asset managers such as VanEck, who targeted early adopters and the crypto community through television ads for their Bitcoin ETF, BlackRock has taken a different approach. They have created a two-minute video featuring one of their executives explaining Bitcoin’s value proposition and how investors can gain exposure to their ETF. This strategy is aimed at engaging baby boomers and expanding the investor base for their offering.

The fees charged by issuers also play a role in attracting capital. BlackRock has set its fee for the iShares ETF at 0.12% for the first year or until the fund reaches $5 billion in assets under management, after which it plans to increase the fee to 0.25%. Other issuers such as ARK Invest, VanEck, and Bitwise also offer competitive fees ranging from 0.20% to 0.25%. These fees are not directly billed to investors but are deducted from the ETF’s performance, thus reducing investor returns.

Bloomberg analyst James Seyffart predicts that Bitcoin ETFs will attract a total of $10 billion in capital over the first year. With BlackRock’s iShares Bitcoin Trust leading the way, the rapid growth in AUM suggests increasing investor interest in cryptocurrency investment products. As Bitcoin continues to gain mainstream acceptance and confidence grows in the potential of ETFs, more investors are likely to be drawn to this new asset class.