BlackRock’s cryptocurrency-focused exchange-traded funds (ETFs) have established themselves as a significant revenue stream, generating $260 million for the largest asset manager globally, marking a “benchmark” model for traditional investment entities aiming for profitable business avenues.
BlackRock’s Bitcoin (BTC) and Ether (ETH) ETFs yield a combined annual revenue of $260 million, with $218 million stemming from Bitcoin ETFs and $42 million from Ether products, as reported on Tuesday by Leon Waidmann, head of research at the Onchain Foundation.
The success of BlackRock’s crypto-focused ETFs could prompt more investment giants from traditional finance (TradFi) to introduce regulated cryptocurrency trading products, positioning BlackRock’s crypto ETFs as a “benchmark” for institutions and traditional pension funds, according to Waidmann.
“This isn’t experimentation anymore. The world’s largest asset manager has demonstrated that crypto is a substantial profit center. That’s a quarter-billion-dollar business established almost instantly. In comparison, many fintech unicorns take a decade to reach that level.”
Waidmann likened the ETFs to Amazon, which began with books before expanding its offerings. He described the ETFs as the “entry point into the crypto world.”
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The expansion of BlackRock’s ETFs indicates that institutions may prolong the existing crypto market cycle. Inflows into ETFs and corporate treasuries could maintain demand beyond the industry’s traditional four-year halving cycle, some analysts suggest.
Additionally, integrating cryptocurrency into US 401(k) retirement plans might represent a significant influx of capital for Bitcoin, potentially elevating its price to $200,000 before year-end, according to André Dragosch, head of European research at crypto asset manager Bitwise.
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BlackRock’s Bitcoin ETF nears $85 billion milestone
Currently, BlackRock’s fund is nearing $85 billion in total assets under management (AUM), representing 57.5% of the overall US spot Bitcoin ETF market share, according to blockchain data from Dune.
This milestone is achieved less than two years after the Bitcoin ETFs commenced trading on January 11, 2024.
In comparison, Fidelity’s ETF holds $22.8 billion, accounting for 15.4% of the overall market share, making it the second-largest US spot Bitcoin ETF.
This positions BlackRock’s spot Bitcoin ETF as the world’s 22nd largest fund among both crypto and traditional ETFs, rising from the 31st largest in January, according to data from VettaFi.
Moreover, ETF inflows may contribute to Bitcoin experiencing another price discovery rally towards new all-time highs in the upcoming weeks, as stated by Ryan Lee, chief analyst at Bitget exchange.
“With BTC and ETH ETFs already drawing in significant inflows, the macroeconomic backdrop favors a ‘buy the dip’ strategy, as institutional engagement amidst policy fluctuations reinforces a bullish foundation for risk assets,” the analyst remarked to Cointelegraph.
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