BlackRock’s cryptocurrency-based exchange-traded funds (ETFs) have turned into a significant revenue source, generating $260 million for the world’s largest asset manager, marking a “benchmark” model for traditional investment funds aiming for profitable business models.
BlackRock’s Bitcoin (BTC) and Ether (ETH) ETFs are producing a combined $260 million in annual revenue, with $218 million from Bitcoin ETFs and $42 million from Ether products, as reported on Tuesday by Leon Waidmann, head of research at the nonprofit Onchain Foundation.
The success of BlackRock’s crypto-focused ETFs could encourage more investment giants from traditional finance (TradFi) to create regulated cryptocurrency-based trading products, with BlackRock’s ETFs acting as a “benchmark” for institutions and traditional pension funds, according to Waidmann.
“This has transcended experimentation. The world’s largest asset manager has established that crypto is a serious revenue stream. That’s a quarter-billion-dollar business, developed almost overnight. In comparison, many fintech unicorns take a decade to achieve that.”
Waidmann likened the ETFs to Amazon, which initially focused on books before expanding into a diverse range of products. He noted the ETFs as the “gateway into the crypto market.”
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The expansion of BlackRock’s ETFs is indicative of a potential prolongation of the current crypto market cycle. Analysts suggest that inflows from ETFs and corporate treasuries might sustain demand beyond the industry’s usual four-year halving cycle.
The addition of cryptocurrency to US 401(k) retirement plans could also serve as a substantial capital influx for Bitcoin, propelling 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 closing in on $85 billion in total assets under management (AUM), representing the majority or 57.5% of the total US spot Bitcoin ETF market share, according to blockchain data from Dune.
This milestone arrives less than two years after the Bitcoin ETFs were first launched for trading on January 11, 2024.
In contrast, Fidelity’s ETF currently holds $22.8 billion, accounting for 15.4% of the overall market share as the second-largest US spot Bitcoin ETF.
This positions BlackRock’s spot Bitcoin ETF as the world’s 22nd largest fund across both crypto and traditional ETFs, rising from the 31st largest in January, according to VettaFi data.
Moreover, ETF inflows may catalyze another price discovery rally for Bitcoin, reaching new all-time highs in the coming weeks, per Ryan Lee, chief analyst at Bitget exchange.
“With BTC and ETH ETFs attracting significant inflows, the macro environment supports a ‘buy the dip’ strategy, as institutional participation amid regulatory discussions solidifies a bullish foundation for risky assets,” the analyst explained to Cointelegraph.
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