BlackRock’s iShares Bitcoin Trust ETF (IBIT) has out-earned its 25-year-old iShares Core S&P 500 ETF (IVV) in annual fee revenue, marking a significant milestone for cryptocurrency’s integration into traditional finance.
This development, first reported in July 2025 and reaffirmed in recent analyses, underscores the explosive demand for regulated Bitcoin exposure amid the asset’s price rally to new highs.
As of early October 2025, IBIT’s revenue lead has widened further, driven by its rapid asset growth and higher fee structure. IBIT launched in January 2024 as one of the first U.S. spot Bitcoin ETFs, quickly becoming BlackRock’s fastest-growing product.
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Despite managing far fewer assets than IVV, IBIT generates more revenue due to its expense ratio being over eight times higher 0.25% vs. 0.03%. This “revenue density” highlights how crypto products command premium fees in a nascent market, contrasting with the fee compression in mature equity ETFs.
Bloomberg analyst Eric Balchunas October 2025 update; earlier July 2025 figures showed a narrower gap of $187.2M vs. $187.1M. IBIT has seen inflows in 17 of its first 18 months, attracting institutions like hedge funds and pensions seeking Bitcoin as a “store of value” without direct custody risks.
This reflects broader Wall Street adoption, with Bitcoin ETFs capturing $54 billion in total inflows since approval. As the world’s largest asset manager $10+ trillion AUM, BlackRock’s CEO Larry Fink has called Bitcoin “digital gold.”
IBIT now ranks as the firm’s top revenue-generating ETF, outpacing even other iShares staples. Analysts predict this could pave the way for ETFs on Ethereum, Solana, or tokenized real-world assets (RWAs).
The milestone signals Bitcoin’s maturation beyond speculation. With BTC trading around $124,000 13% above of all-time highs as of July 2025, July’s historical 7% average gains suggest momentum could push IBIT toward $100 billion AUM soon—faster than Vanguard’s S&P 500 ETF took over 5 years to hit that mark.
This isn’t just about fees; it’s reshaping portfolios. Traditional investors can now blend Bitcoin for hedging inflation/volatility with S&P 500 exposure seamlessly. However, Bitcoin’s higher volatility means IBIT suits risk-tolerant allocations, not core holdings.
Bitcoin is earning blackrock the same money as the entire u.s. stock market index, with a fraction of the capital,” fueling speculation on an “altcoin ETF wave.
The fact that BlackRock’s iShares Bitcoin Trust ETF (IBIT) is out-earning its 25-year-old iShares Core S&P 500 ETF (IVV) in annual fee revenue carries significant implications for investors, the financial industry, and the broader cryptocurrency market.
Investors can now seamlessly include Bitcoin alongside traditional assets like stocks and bonds, potentially redefining portfolio diversification strategies. Bitcoin’s low correlation with equities makes it appealing as a hedge against inflation or market volatility.
IBIT’s 0.25% expense ratio, compared to IVV’s 0.03%, highlights the lucrative nature of crypto ETFs. With IBIT generating $244.5 million annually vs. IVV’s $204 million despite managing 7x fewer assets, asset managers can charge premium fees for crypto products due to their novelty and complexity.
BlackRock’s success with IBIT may spur competitors to launch or expand their own crypto ETFs, potentially covering altcoins like Ethereum or Solana, or even tokenized real-world assets (RWAs). This could accelerate product development in the crypto space.
For BlackRock, IBIT’s outperformance diversifies revenue away from low-fee equity ETFs, which face fee compression in mature markets. Other asset managers may follow suit to capture similar high-margin opportunities.
IBIT’s $52 billion in net inflows since its January 2024 launch 55% of the Bitcoin ETF market reflects strong investor appetite, particularly from institutions. This demand could drive further Bitcoin price appreciation, as Bitcoin trade around $124,000.
Bitcoin ETFs are generating outsized revenue with a fraction of the capital of equity ETFs. This efficiency could shift capital flows toward crypto, potentially challenging the dominance of traditional index funds in investor portfolios.
While IBIT offers regulated access, Bitcoin’s higher volatility compared to the S&P 500 means it’s better suited for risk-tolerant investors or smaller portfolio allocations. Investors must weigh potential returns against price swings.
The success of IBIT, following the SEC’s approval of spot Bitcoin ETFs in January 2024, may encourage regulators to greenlight more crypto-based financial products. This could include ETFs for other cryptocurrencies or innovative structures like tokenized asset funds.
BlackRock’s pivot to crypto aligns with its exploration of tokenizing real-world assets like real estate, bonds. IBIT’s profitability could fund further blockchain-based innovation, reshaping capital markets.
As more crypto ETFs enter the market, competition could drive down expense ratios, eroding the revenue advantage IBIT currently enjoys. Bitcoin’s rally and ETF accessibility could create wealth for early adopters but widen inequality if gains concentrate among institutions or high-net-worth investors.
This milestone is a pivotal moment for crypto’s integration into mainstream finance, with BlackRock’s IBIT signaling a new era of profitability and investor interest. However, it also underscores the need for careful risk assessment in this rapidly evolving space.
Bitcoin’s Exchange Flows Plunge to 3-Year Lows
Bitcoin (BTC) is riding high in early October 2025, trading steadily above $124,000 after smashing through a new all-time high of $126,000 earlier this week.
This surge isn’t just fueled by retail FOMO—on-chain metrics are painting a picture of deepening scarcity and holder conviction. Specifically, Bitcoin’s exchange net flows have cratered to their lowest levels in nearly three years, with a 14-day simple moving average (SMA) of net flow at -7,210 BTC as of October 4.
This means more BTC is being withdrawn from exchanges than deposited, a classic sign that long-term holders (HODLers) are opting to self-custody rather than sell. Over 7,200 BTC have exited exchanges in recent days, per CryptoQuant data.
This outflow reflects both short- and long-term holders stacking sats, reducing available liquidity on centralized platforms. Exchange reserves have dipped to around 2.4 million BTC—their lowest in six years—amplifying the “supply shock” narrative.
Spot Bitcoin ETFs have seen massive inflows, clocking nearly $1 billion in just three days and $3.2 billion last week alone. Institutional demand is outpacing miner emissions by a 3:1 ratio, with firms like Strategy and treasury adopters locking up supply.
Combined with $14 billion in total exchange outflows over two weeks, this dynamic is squeezing sellers out of the equation. Similar low-flow periods in past cycles like in 2021 preceded explosive rallies.
Analysts note that 99.3% of BTC supply is now in profit, which could invite short-term profit-taking, but the structural scarcity points to upside bias. The stars are aligning for BTC to test $130,000 soon, potentially by mid-to-late October.
Declining exchange balances since 2019; ETF inflows sustaining uptrend. ETF-driven momentum; slight trim from prior $135K forecast. Bullish if holds $118K support; bear low at $70K.
Technically, BTC is coiling in a bull pennant pattern above the $122K–$124K EMA support, with RSI at 69 elevated but not overbought. A break above $126.5K could trigger a squeeze toward $130K, though a tactical pullback to $118K–$120K remains possible if profit-taking hits.
Resistance at $127K is the immediate hurdle, but with MACD flashing green and social euphoria building like the Saylor and Pomp hyping new highs, the path of least resistance is up.
Daily RSI divergence and a flipping MACD could spark a cooldown, especially with $113 million in shorts liquidated recently—more squeezes mean volatility. Geopolitical tensions or a hotter-than-expected CPI could test $114K–$115K support.
If flows reverse and ETF inflows stall, a drop to $108K isn’t off the table, but current metrics make this low-probability. In short, these 3-year low exchange flows are a green light for accumulation, not distribution.
If institutional bids keep pouring in, $130K isn’t just a target—it’s the floor for what’s next. Reduced supply on exchanges, with steady or growing demand, often drives Bitcoin prices higher as buyers compete for fewer available coins.
Scarcity can reduce trading volume, making it harder to buy or sell large amounts without significantly impacting the price. With less Bitcoin available, price swings can become more pronounced due to lower liquidity and heightened sensitivity to buy/sell orders.
Scarcity often signals that investors are moving Bitcoin to cold storage, indicating long-term holding and reduced selling pressure.