- Bitcoin reached an all-time high above $126,000 amid concerns about the U.S. dollar’s value and increased demand for digital assets.
- BlackRock’s spot bitcoin ETF, IBIT, is nearing $100 billion in assets under management and could soon surpass this threshold.
- The ETF has grown faster than any previous fund of similar size, attracting major inflows and becoming BlackRock’s most profitable ETF.
- Bitcoin and other crypto ETFs saw record global inflows, with nearly $6 billion last week, reflecting increased investor interest during times of economic uncertainty.
- Analysts expect as much as $20 billion more to flow into bitcoin ETFs by the end of the year, with BlackRock’s fund expected to receive the largest share.
Bitcoin’s price rose sharply in early October, reaching a new record above $126,000 per coin. The rally comes as investors respond to worries over the U.S. dollar’s stability and seek out alternatives like digital assets.
BlackRock’s IBIT spot bitcoin exchange-traded fund is approaching $100 billion in assets under management. The ETF was launched in 2024 and benefited from strong market inflows and Bitcoin’s increasing value, helping it near this historic milestone. According to Eric Balchunas and James Seyffart from Bloomberg Intelligence, IBIT is reaching $100 billion about five times faster than any previous ETF of similar size.
The recent surge in Bitcoin Price coincided with record inflows of over $3 billion to U.S. bitcoin ETFs in the first week of October, according to Dom Harz of BOB, a bitcoin decentralized finance platform. Analysts forecast that bitcoin ETFs could gain an additional $20 billion in inflows by the end of the year, with much of it likely going to BlackRock’s fund. The IBIT ETF charges a 0.25% management fee and is expected to generate approximately $240 million in annual revenue for BlackRock.
IBIT surpassed BlackRock’s previous top-performing funds, IWF and EFA, in July and has become the firm’s most profitable ETF. James Seyffart of Bloomberg noted in an interview that IBIT and similar crypto ETFs faced skepticism before their launches in January 2024, but actual inflows have exceeded even their most optimistic expectations. According to analysts, “even these numbers have blown away our most bullish expectations.”
Traditional finance firms increasingly use the IBIT ETF as their main channel to invest in bitcoin, with interest in the “debasement trade”—investing in assets expected to do well if a currency loses value—also driving demand. Gold has also risen, but some analysts believe bitcoin and other digital assets may provide similar benefits, especially as gold becomes more widely bought.
Crypto ETFs overall saw nearly $6 billion in inflows globally last week, according to CoinShares. James Butterfill of CoinShares said this signals “the growing recognition of digital assets as an alternative in times of uncertainty.” Experts suggest that alternative assets, including bitcoin, play a useful role for investors seeking to protect against inflation and currency risks.
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