BlackRock’s cryptocurrency-based Exchange-Traded Funds (ETFs) have become a revenue-raising machine, bringing $260 million in revenue to the world’s largest asset managers, signaling the traditional investment fund “benchmark” model for a lucrative business model.
BlackRock’s Bitcoin (BTC) and Ether (ETH) ETFs generate $260 million annual revenue, including $228 million from Bitcoin ETFs and $42 million from Ether products.
The profitability of BlackRock’s crypto-centric ETFs could drive more investment giants out of the traditional financial (Tradfi) space to launch regulated cryptocurrency-based trading products that serve as a “benchmark” for institutions and traditional pension funds, Waidmann said.
“This is no longer an experiment. The world’s largest asset manager has proven that crypto is a serious profit center. It’s a $1.5 billion business and is built almost overnight. For comparison, many fintech unicorns don’t make it in 10 years.”
Waidmann compared ETFs to Amazon. Amazon started with books before scaling it all. He said ETFs are “enterpoints into the crypto world.”
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The growth of BlackRock’s ETFs is seen as evidence that institutions can expand their current crypto market cycle. Inflows of ETFs and companies from the Treasury Department could continue to drive demand beyond half of the industry’s previous four-year period, some analysts said.
Inclusion of cryptocurrencies in the US 401(k) retirement plan is also a major source of capital for Bitcoin, pushing prices to $200,000 by the end of the year, according to André Dragosch, head of European research at Bitwise at Crypto Asset Manager.
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BlackRock’s Bitcoin ETF is approaching a $85 billion milestone
Meanwhile, BlackRock’s funds, according to Dune’s blockchain data, are approaching the total assets (AUM) of managed assets (AUM), accounting for 57.5% of the US Bitcoin ETF market share.
The milestone occurs less than two years after Bitcoin ETF debuted on January 11, 2024 for trading.
In contrast, Fidelity’s ETF holds only $22.8 billion, making it 15.4% of its total market share as the US’s second largest Spot Bitcoin ETF.
This makes BlackRock’s Spot Bitcoin ETF the 22nd largest fund in both crypto and traditional ETFs, according to Bettafi data.
Meanwhile, the ETF influx could help Bitcoin see another price discovery rally in the coming weeks, according to Ryan Lee, chief analyst at Bitget Exchange.
“As BTC and ETH ETFs are already gathering a massive influx, the macro background supports the ‘buy DIP’ approach as policy noise helps solidify bullish floors for risky assets,” an analyst told Cointelegraph.
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