The bitcoin ETF has started to fetch more than BlackRock's flagship fund on the S&P 500

Investment giant BlackRock has an exchange-traded fund that generates more fees than its flagship S&P 500 Index ETF. The iShares Bitcoin Trust has surpassed the iShares Core S&P 500 ETF in fee income, despite being almost nine times smaller than it. Investors should keep a close eye on what is happening: bitcoin is gradually transforming from a speculative bet to a tool for balancing risk and return in portfolios.

Launched a year and a half ago, the iShares Bitcoin Trust, with $75 billion in assets, has seen inflows in 17 of the last 18 months. At a 0.25% fee, it brings in about $187.2 million a year for BlackRock, calculated by Bloomberg. According to the agency, iShares Core S&P 500 - BlackRock's oldest fund on the S&P 500 index brings in slightly less - $187.1 million. It outperforms the bitcoin fund by assets almost nine times, but its commission is only 0.03%.

Since the launch of the U.S. spot bitcoin ETF in January 2024, iShares Bitcoin Trust has attracted $52 billion of the $54 billion in net inflows into the sector. It accounts for more than 55% of all assets in bitcoin ETFs. In turn, the iShares Core S&P 500, which has been in existence for 25 years, is the third-largest exchange-traded fund in the U.S. - outpaced only by two ETFs on the same index from Vanguard and State Street, according to the article.

The surge in investor interest in bitcoin ETFs followed the regulators' decision to allow them into the U.S. market. This triggered an influx of funds from hedge funds, pension funds and banks. While iShares Bitcoin Trust's fees are comparable to peers, it already ranks among the top 20 U.S. exchange-traded funds by trading volume, notes Bloomberg.

"That iShares Bitcoin Trust has surpassed the iShares Core S&P 500 in annualized fee income reflects both growing investor demand for bitcoin and a significant reduction in fees for access to core stocks," said NovaDius Wealth Management President Nate Geraci. - While bitcoin funds have very competitive commission rates, iShares Bitcoin Trust proves: investors are willing to pay more for assets that they believe are truly valuable to a portfolio."

Bitcoin could rise to $116,000 as early as this month, reported Cointelegraph, citing a forecast published July 3 by 10x Research analyst Marcus Thielen. That's 6.5 percent above the current price and 3.6 percent above the all-time high of $111.97, reported the publication. The analyst pays special attention to investments in bitcoin-ETFs: until July 2, they showed net inflows for 15 consecutive days. Even a short-term outflow does not change the picture: "These flows are increasingly outpacing price movements, signaling demand from institutional investors dictated by macroeconomic factors rather than short-term trends," Tielen said.

In June, BlackRock increased its position in bitcoin by $3.85 billion. At the same time, the company spread its purchases over many small transactions so as not to rock the market. The investment giant's tactics are in line with the classic principles of risk management - don't make sudden moves and build positions gradually - and show that BlackRock is entering the cryptocurrency for a long time, talks on the website of the AInvest investment platform.

BlackRock's large-scale purchase of bitcoin indicates a growing interest in the cryptocurrency by traditional financial institutions. AInvest recommends investors to keep a close eye on what is happening: the growing institutional involvement can significantly change the role of bitcoin in portfolios - no longer as a speculative bet, but as a tool for balancing risk and return.

This article was AI-translated and verified by a human editor