BlackRock’s Bitcoin ETF Now Out-Earns Its Flagship S&P 500 Fund

A 25-basis-point fee on a fast-growing Bitcoin product now delivers more annual revenue to BlackRock than a three-basis-point fee on a $624 billion S&P 500 tracker. It’s another sign that a Bitcoin bull market is brewing and new Bitcoin all-time highs are close.

The headline numbers

Source: Bloomberg, BlackRock, July 2 2025.

Despite IVV holding roughly nine times more assets, IBIT’s higher fee structure makes it the larger revenue generator for the world’s biggest asset manager.

How we got here

• Launch and growth. IBIT debuted in January 2024 as one of the first U.S.-listed spot-Bitcoin ETFs. Except for a single outflow month, it has attracted steady net inflows, reaching $52 billion in AUM—by far the sector leader.
  
• Pricing power. A 0.25 % fee looks steep next to low-cost core equity products, but it reflects custody, insurance, and regulatory overhead unique to holding a digital bearer asset. Investors have accepted the premium for turnkey exposure.
  
• Fee compression elsewhere. Plain-vanilla index ETFs like IVV fought a decades-long price war down to single-digit basis points. Crypto ETFs, by contrast, remain a young category where providers still command traditional “specialty” fees.
  

Blackrock’s Bitcoin ETF out earns its IVV ETF, source: X

Macro backdrop turbo-charging demand

1. Liquidity surge. U.S. M2 money supply touched a record $21.94 trillion in May, extending a year-long climb. Extra cash in the system often finds its way into risk assets—including Bitcoin.
   
2. Fiscal alarm bells. Bridgewater founder Ray Dalio warns that Washington’s newly enacted “Big Beautiful Bill” locks in roughly $7 trillion in annual spending against $5 trillion in revenue, pushing debt from ~100 % to ~130 % of GDP within a decade. Such deficit math strengthens the narrative for scarce, non-sovereign assets.
   
3. Seasonal tailwind. July is historically Bitcoin’s friendliest month, averaging a 7 % gain over the past decade.  Entering the month, BTC hovered just 3 % shy of its all-time high near $112 k, amplifying retail interest and, by extension, ETF flows.
   

Implications for BlackRock and the market

• Revenue density beats scale. IBIT’s success shows that in the ETF business, basis points multiplied by narrative can rival sheer asset heft. For BlackRock, a product representing 0.5 % of its ETF assets now matches the revenue of a core pillar.
  
• Competitive pressure ahead. If a rival drops fees to 15 bps, IBIT’s advantage shrinks quickly. Investors should watch for a second-round price war as Vanguard, Fidelity, and Franklin build track records in their own spot-Bitcoin offerings.
  
• Mainstreaming accelerates regulation. With household retirement plans accessing Bitcoin through ticker symbols, political pressure to clarify tax and custody rules will rise—potentially resetting cost structures and fee economics.
  

Investor considerations

While IBIT offers convenient, regulated Bitcoin exposure, it also inherits the asset’s 24/7 price swings and potential policy shocks. IVV remains the low-cost, core beta vehicle for diversified U.S. equities. Allocators should weigh these characteristics before chasing yield-like fee revenue statistics. It does signal however, that now could be a good time to buy crypto assets. Bitcoin is looking especially strong. For those investors wondering if now is a good time to buy Bitcoin, the risk has been reduced.  

Bottom line: Fee revenue, not AUM, tells a new story for BlackRock. A single-asset crypto ETF has overtaken the firm’s flagship S&P 500 fund in dollars earned—highlighting both investors’ appetite for digital assets and the premium they will still pay for simplicity and security.