This week’s Spotlight ETF may eventually turn out to be ETF of the year, but let’s not get ahead of ourselves and for now have a look at the record-setting debut of the iShares Bitcoin ETF (IBIT).
Launched Jan. 11 along with 10 rival spot bitcoin ETFs, each vying for the eager dollars of investors and financial advisors looking for an easy onramp to cryptocurrency investing, IBIT in short order pulled away from the pack.
While currently up to more than $12 billion in assets under management, IBIT entered March by reaching the $10 billion in assets mark faster than any other ETF in history.
For some perspective, it took the SPDR Gold Shares ETF (GLD) more than two years after its 2004 launch to hit $10 billion.
For even more perspective, the next largest spot bitcoin ETF among the 11 launched in January is the Fidelity Wise Origin Bitcoin ETF (FBTC) at $7.6 billion.
BlackRock’s Heft Pushes IBIT to the Top
Weekly Flows since fund launched
The why behind the breakout popularity of IBIT is at least two-fold.
For starters, we’re talking about New York-based BlackRock Inc., which at more than $10 trillion in total assets under management, has the kind of resources to overshadow whatever it wants to overshadow in the financial services industry.
BlackRock’s iShares ETF brand manages $2.7 trillion.
Compare that to Boston-based Fidelity Investments, which is no slouch at $3 trillion in total assets, including nearly $700 billion in ETF assets, but still a third the size of BlackRock.
“When you see stuff fly out the door, that’s where your attention goes,” said Mark Connors, head of research at the Canadian digital asset management firm 3iQ.
“Right now, the BlackRock sales force is no longer talking about ESG or bonds,” he added. “They’re looking at IBIT.”
The second part of the two-fold growth spurt of IBIT is the rallying price of the underlying bitcoin, which touched an all-time high earlier this week and is up more than 55% over the past 30 days.
Granted, the bitcoin rally is lifting all spot bitcoin ETFs, but when price appreciation accounts for about 40% of the asset growth in those ETFs, bigger just gets bigger.