IBIT has become BlackRock's largest revenue-generating ETF.

IBIT, BlackRock's Bitcoin ETF, is currently the highest revenue-generating product for the company in this asset category. The fund brings in $186 million in fee revenue each year, surpassing IVV – BlackRock's ETF that follows the S&P 500 index – by a margin of $3 million.

However, IBIT and IVV still have similarities: this Bitcoin ETF has a volatility nearly equivalent to the S&P 500. The volatility of IBIT has sharply decreased along with Bitcoin, raising concerns about the potential for explosive success in the future of the crypto market.

Transaction fees from BlackRock's Bitcoin ETF set a new record

Right after the launch of IBIT, BlackRock's Bitcoin ETF quickly became a resounding success. In less than a year, industry experts hailed it as the "greatest ETF launch in history," surpassing records that had stood for decades.

Today, analyst Nate Geraci continues to note another win, as IBIT has become the ETF with the highest trading fee revenue for BlackRock.

In other words, BlackRock is experiencing stronger trading activity from a Bitcoin ETF compared to ETFs based on traditional stock markets. This is a slowly unfolding but impressive achievement.

Although Bitcoin has recently faced some obstacles, IBIT still stands out as a leader in the ETF group. While the digital asset market had mixed sentiments in May, IBIT still recorded an increase and continued to lead as new capital flows strongly this month.

Although recently BlackRock has shown interest in accumulating altcoins, their purchases of Bitcoin indicate that the focus remains on IBIT.

However, there are still some lingering concerns. IBIT generates higher fee revenue compared to IVV – the ETF that follows the S&P 500 index from BlackRock – but both are gradually converging in another aspect. Today, ETF analyst Eric Balchunas pointed out that the volatility of IBIT is now nearly similar to that of IVV.

A year ago, IBIT had volatility 5.7 times higher than IVV, which was the main driving force that helped it achieve record growth.

The volatility of IBIT is narrowing | Source: Eric BalchunasTo be fair, the entire Bitcoin ETF space has gradually reduced its volatility over the past few months, along with Bitcoin itself. In this context, BlackRock's IBIT is simply a trendsetter, not an exception. However, this phenomenon also brings along some downsides.

Simply put, ETF issuers and large companies are significantly impacting the crypto market through capital inflows. Some experts are concerned that this influx of capital is permanently disrupting the long-standing rules governing Bitcoin's movements.

Since the approval of ETF funds, the price of BTC has never dropped below the valuation at that time. This is an unprecedented phenomenon, especially for an asset that is known for its volatility. We have witnessed halving, concerns about recession, and negative political reactions towards the entire industry, but all of these have only caused minor corrections.

Currently, BlackRock's IBIT is no longer setting records for exponential growth like before, but only stands out for revenue from transaction fees. Can this fund replicate its initial success in the current market context?

Minh Anh