BlackRock's Bitcoin exchange-traded fund (ETF) reached $2 billion in assets under management (AUM) on Jan. 26, just two weeks after it debuted on the Nasdaq.
According to data released by Bloomberg analyst James Seyffart, Bitcoin’s (BTC) price performance intraday has pushed the fund’s market capitalization to $2.11 billion. The cryptocurrency’s price has broken through $42,000 for the first time in nearly seven days after a sell-off following the launch of ETFs on Jan. 11.
“Assets under management” is a term used to describe the total market value of all the financial assets held by a fund on behalf of its clients. This means that BlackRock's iShares Bitcoin Trust (IBIT) is leading in the race for investors’ capital, just ahead of Fidelity’s Wise Origin Bitcoin Fund (FBTC) with $1.8 billion in flows over the previous 10 days.
BlackRock is leveraging its market reputation as the world’s largest asset manager to attract broader audiences to its crypto-based product.
Unlike asset managers such as VanEck, which targeted early adopters and the crypto community with Bitcoin ETF television ads, BlackRock chose to communicate to baby boomers with a two-minute video featuring one of its executives outlining Bitcoin’s value proposition and how investors can receive exposure to its new ETF.
The annual fees charged by issuers may also be contributing to capital attraction. BlackRock set its fee for the iShare ETF at 0.12% for the first 12 months or until the first $5 billion in assets under management, then plans to increase it to 0.25%.
Several other issuers offer competitive fees as well, with ARK Invest charging 0.21%, VanEck listing a fee of 0.25%, and Bitwise charging 0.20%. Fees on ETFs are not billed directly to investors but rather deducted from the ETF’s performance, which reduces investors’ return.
Seyffart anticipates Bitcoin ETFs to gather $10 billion in capital over the first year.
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