BlackRock’s cryptocurrency-based exchange-traded funds (ETFs) have emerged as a significant revenue source, generating $260 million for the world’s largest asset manager, highlighting a “benchmark” model for traditional investment funds aiming for profitable business strategies.
BlackRock’s Bitcoin (BTC) and Ether (ETH) ETFs are responsible for a total of $260 million in annual revenue, comprising $218 million from Bitcoin ETFs and $42 million from Ether products, according to data disclosed Tuesday by Leon Waidmann, head of research at the nonprofit Onchain Foundation.
BlackRock’s crypto-focused ETFs’ profitability may incentivize more investment giants from the traditional finance (TradFi) sector to initiate regulated cryptocurrency-based trading products, with BlackRock’s crypto ETFs acting as a “benchmark” for institutions and traditional pension funds, Waidmann mentioned.
“This isn’t experimentation anymore. The world’s largest asset manager has demonstrated that crypto is a serious profit center. That’s a quarter-billion-dollar business, built almost overnight. For comparison, many fintech unicorns don’t make that in a decade.”
Waidmann likened the ETFs to Amazon, which began with books before expanding to a wide range of products. He indicated that the ETFs serve as the “entry point into the crypto world.”
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The expansion of BlackRock’s ETFs is viewed as a signal that institutions might extend the ongoing crypto market cycle. Inflows from ETFs and corporate treasuries could continue to boost demand beyond the industry’s usual four-year halving cycle, some analysts assert.
The integration of cryptocurrency into US 401(k) retirement plans may also serve as a substantial source of capital for Bitcoin, potentially driving its price to $200,000 by year’s 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 the majority or 57.5% of the total spot Bitcoin ETF market share in the US, according to blockchain data from Dune.
This milestone is achieved less than two years after Bitcoin ETFs were first introduced for trading on Jan. 11, 2024.
In comparison, Fidelity’s ETF holds $22.8 billion, accounting for 15.4% of the total 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 across both cryptocurrency and traditional ETFs, moving up from the 31st largest in January, according to data from VettaFi.
Additionally, ETF inflows may boost Bitcoin towards another price discovery rally, hitting new all-time highs in the forthcoming weeks, according to Ryan Lee, chief analyst at Bitget exchange.
“With BTC and ETH ETFs already drawing substantial inflows, the macro environment supports a ‘buy the dip’ strategy as institutional engagement amid policy fluctuations helps establish a bullish foundation for risk assets,” the analyst shared with Cointelegraph.
Magazine: Bitcoin to see ‘one more big thrust’ to $150K, ETH pressure builds
