BlackRock’s Crypto Trusts Generate Over $260 Million Revenue

TLDR

• IBIT generated $218 million, ETHA contributed $42 million.
• Combined assets under management exceed $100 billion.
• Over 75% of Bitcoin ETF inflows go to IBIT.

BlackRock’s iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA) have together generated more than $260 million in annual revenue. IBIT alone accounted for $218 million, while ETHA contributed $42 million. This financial performance was achieved in under two years, signaling a shift towards institutional acceptance of crypto assets.

BlackRock, the world’s leading asset manager, played a key role in this development. The company, under the leadership of CEO Larry Fink, has shifted from a traditional finance focus to acknowledging the potential of digital assets.

Significant Institutional Involvement and Revenue

BlackRock’s entry into crypto ETPs has earned them more than $100 billion in combined assets under management between their Bitcoin and Ethereum trusts. IBIT has amassed $88 billion, and ETHA holds $17.25 billion. These funds have seen significant net inflows, largely due to institutional interest following U.S. regulatory approvals.

Omar Kanji, Partner at Dragonfly, analyzed inflow and fee data, revealing these substantial earnings. He stated, “IBIT’s rapid growth highlights how strongly institutional demand for Bitcoin has driven its success.”

Impact on the Cryptocurrency Ecosystem

The establishment of BlackRock’s crypto ETPs has affected BTC and ETH directly, holding a predominant market share in U.S. ETF flows. More than 75% of Bitcoin ETF inflows are captured by IBIT, whereas ETHA commands 72.5% of Ethereum ETF flows.

The movement of assets into these ETFs has led to a contraction of exchange supplies, affecting liquidity. The coins are held off-chain in ETF custody, primarily managed by Coinbase Custody.

Regulatory Developments and Future Implications

U.S. regulatory bodies approved spot Bitcoin ETFs in January 2024, followed by Ethereum ETFs in July 2024. These approvals have facilitated institutional investment into the crypto market through regulated products.

BlackRock’s success with cryptocurrency ETFs marks a departure from the efficiency of its traditional ETFs. The significant demand underscores the growing role of crypto assets in the financial sector.

“BlackRock now makes over a quarter billion dollars a year from crypto and they did it in < 2years.”

@TheOneandOmsy