- Bitcoin’s value soared past $126,000 on Monday.
- Exchange-traded funds are fueling the surge in purchases.
- BlackRock’s IBIT fund is approaching $100 billion in managed assets.
Bitcoin’s upward momentum shows no signs of slowing down – and neither does BlackRock’s success.
The leading cryptocurrency reached a new high of $126,080 on Monday. Simultaneously, BlackRock’s IBIT exchange-traded fund is rapidly becoming the firm’s most lucrative ETF.
This is a remarkable accomplishment for a fund that has been around for less than two years.
“IBIT is nearing $100 billion and is now BlackRock’s most profitable ETF by a considerable margin,” Bloomberg Intelligence ETF analyst Eric Balchunas commented on X. “Look at the age of the other top 10. It’s astounding.”
The speed of IBIT’s growth is unprecedented. It took BlackRock’s S&P 500 ETF a quarter of a century to reach its current level of profitability. IBIT has surpassed that in under two years.
Experts anticipate that Bitcoin ETFs will attract another $20 billion in investments before 2026.
Currently, two key factors are driving investor interest in Bitcoin. Firstly, interest rates in the US are declining and are projected to continue decreasing. Secondly, the dollar is weakening amid economic uncertainty.
This combination prompts investors to explore alternative investment opportunities, such as Bitcoin, to safeguard their assets.
These converging factors suggest that Bitcoin could potentially exceed $135,000 very soon. However, this is only part of the bigger picture.
Arthur Hayes, CIO of Maelstrom, believes a price of $250,000 per Bitcoin is achievable. Meanwhile, analysts at Bernstein, Bitwise, and Standard Chartered in the UK are forecasting a $200,000 Bitcoin value before the year’s end.
$100 billion
With $97.8 billion in assets, IBIT needs slightly above 2% growth to surpass $100 billion – a key psychological level that would affirm the BlackRock fund’s place as one of the world’s largest ETFs, regardless of asset type.
Bitcoin’s surge to $126,000 is expediting this achievement. Each 1% increase in Bitcoin’s value adds nearly $1 billion to IBIT’s assets under management.
Given the current market dynamics and the expectation for Bitcoin to reach $135,000 in the near future, the $100 billion milestone might be closer than initially projected.
Of the 11 Bitcoin ETF providers, BlackRock, led by Larry Fink, remains the leader. BlackRock holds close to 30% of the 1.3 million Bitcoins held collectively by ETFs, according to data from Dune Analytics.
The age gap
The contrast between IBIT and BlackRock’s other top-performing funds is notable.
The other funds in the firm’s top 10 revenue producers have been active for at least 12 years. Most have been around for over 20 years.
However, IBIT, established on January 11, 2024, has overtaken funds that have been gathering assets since the late 1990s in under two years. And its momentum appears to be increasing.
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Have a tip? Contact him at psolimano@dlnews.com.