BlackRock’s cryptocurrency-based exchange-traded funds (ETFs) have emerged as a major revenue generator, raking in $260 million for the world’s largest asset manager, indicating a “benchmark” model for traditional investment funds aiming for profitable business avenues.
BlackRock’s Bitcoin (BTC) and Ether (ETH) ETFs are contributing a total of $260 million in annualized revenue, with $218 million from Bitcoin ETFs and $42 million from Ether products, according to data provided Tuesday by Leon Waidmann, head of research at the nonprofit Onchain Foundation.
The success of BlackRock’s crypto-focused ETFs may motivate more traditional finance (TradFi) giants to create regulated cryptocurrency-based trading products, with BlackRock’s offerings acting as a “benchmark” for institutions and traditional pension funds, Waidmann stated.
“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, established almost overnight. For context, many fintech unicorns don’t achieve that in a decade.”
Waidmann likened the ETFs to Amazon, which began with books before expanding to various products. He described the ETFs as the “entry point into the crypto world.”
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The rise of BlackRock’s ETFs is seen as proof that institutions could prolong the current crypto market cycle. ETF inflows and corporate treasuries may continue to boost demand beyond the industry’s usual four-year halving cycle, according to some analysts.
The integration of cryptocurrency into US 401(k) retirement plans could also serve as a significant source of capital for Bitcoin, potentially elevating 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
Meanwhile, BlackRock’s fund is on the verge of reaching $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 arrives less than two years after Bitcoin ETFs debuted for trading on January 11, 2024.
In comparison, Fidelity’s ETF holds only $22.8 billion, making up 15.4% of the total market share as the second-largest US spot Bitcoin ETF.
This positions BlackRock’s spot Bitcoin ETF as the 22nd largest fund globally, encompassing both crypto and traditional ETFs, an increase from the 31st largest in January, according to data from VettaFi.
As a result, ETF inflows may trigger another price discovery rally for Bitcoin, reaching new all-time highs in the coming weeks, according to Ryan Lee, chief analyst at Bitget exchange.
“With BTC and ETH ETFs already experiencing substantial inflows, the market conditions support a ‘buy the dip’ strategy, as institutional engagement amidst policy fluctuations helps establish a bullish support for risk assets,” the analyst conveyed to Cointelegraph.
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