The iShares Bitcoin Trust (IBIT) under Blackrock is creating a myth of issuance in the ETF industry.

This Bitcoin ETF, which was established only 11 months ago, has accumulated over 50 billion dollars in asset size, achieving this milestone nearly five times faster than the previous record, making it one of the most successful products in ETF history.

In terms of daily trading volume, IBIT holds over 50% market share among similar products, and based on the current asset size and a rate of 0.25%, the annual management fee income for this product is expected to reach 0.112 billion dollars.

Currently, the product's managed asset size has surpassed Blackrock's Gold ETF (the second-largest Gold Fund globally), with daily trading volume for options products as high as 1.7 billion dollars, far exceeding other similar products.

As a product under the world's largest asset management institution Blackrock, IBIT's success not only opens up new business growth points for the company but also becomes a key force in pushing Bitcoin's price to break the 0.1 million dollars mark, attracting a large number of institutional investors and previously skeptical individual investors to enter the market.

Nate Geraci, president of consulting firm The ETF Store, stated that this product is 'the greatest launch in ETF history.'

A difficult road to break the ice.

The journey of spot Bitcoin ETF in the USA market has not been smooth.

In 2013, when the price of Bitcoin was still less than 100 USD, the Winklevoss brothers first attempted to apply for a Bitcoin ETF, but were denied by the US Securities and Exchange Commission (SEC).

For many years thereafter, similar applications were not approved. It wasn't until Grayscale, a digital asset company, won a crucial judicial victory, along with the strong entry of Blackrock, that the approval of the spot Bitcoin ETF was finally pushed forward.

It is noteworthy that the CEO of Blackrock, Larry Fink, has undergone a significant change in his attitude towards Bitcoin. He once criticized Bitcoin as a money laundering tool, but later changed his stance and viewed it as 'digital gold.'

In January 2024, 12 institutions including Blackrock, Fidelity, VanEck, and Grayscale were authorized to issue the first batch of ETFs directly investing in Bitcoin, and these funds currently jointly Hold approximately 107 billion USD in Assets.

Record growth rate, a new favorite in the derivatives market.

Among many Bitcoin ETFs, IBIT stands out particularly.

Bloomberg intelligence Analyst Eric Balchunas stated that it reached a scale of 50 billion USD five times faster than the second fastest ETF (Blackrock's own iShares Core MSCI EAFE ETF), which took nearly 4 years to reach this milestone.

Calculated at a rate of 0.25%, IBIT is expected to generate approximately 0.112 billion USD in revenue for Blackrock annually. Since its launch, the fund has only experienced 9 days of net outflow, averaging over 50% of the daily trading volume of similar products.

The success of IBIT is also reflected in the activity of its derivatives market. Since the launch of Options Trading on November 19, IBIT options have become one of the most actively traded varieties among ETF options, with an average daily nominal trading volume reaching 1.7 billion USD.

A report by research company Asym500 pointed out that in comparison, the options trading volume of the second and third ranked Fidelity and Grayscale Bitcoin ETFs is only about 1% of IBIT.

Despite the presence of thousands of ETFs in the USA, with over a thousand listed options, establishing institutional-level options liquidity has proven to be quite difficult.

In the past three months, only 13 ETFs have had an average daily nominal trading volume exceeding 1 billion USD.

Reshaping the Industry Landscape

In this revolution of crypto assets, the market landscape is quietly changing.

IBIT's asset scale has surpassed Blackrock's Gold ETF (the second largest gold fund globally), and Nate Geraci anticipates that if the price of Bitcoin does not fall significantly, IBIT is expected to surpass SPDR Gold ETF by 2025, becoming the largest Commodity ETF.

At the same time, Blackrock's main competitor Vanguard has chosen to completely avoid the Bitcoin ETF market and does not even allow its brokerage clients to trade such products.

Geraci stated:

The Vanguard Fund may alienate young investors who view cryptos as a standard portfolio asset, allowing its largest competitor to position itself as a "more forward-looking and innovative Asset Management."