Key Takeaways
- •BlackRock states its Bitcoin ETFs are now the most profitable product family globally.
- •IBIT has experienced historic growth, holding over 3% of Bitcoin supply and generating record fee revenue.
- •Institutional distribution, rather than retail enthusiasm, is identified as the primary driver of ETF demand.
Cristiano Castro, who leads business development for BlackRock in Brazil, revealed at a blockchain event in São Paulo that the company’s Bitcoin ETFs have become its most profitable product family worldwide. This statement is significant coming from an asset manager overseeing more than $13.4 trillion in assets and managing over 1,400 ETFs.
An Internal Forecast That Was Completely Wrong — in a Good Way
The true scale of the impact was not immediately apparent when the first U.S. spot Bitcoin ETF was introduced in January 2024. BlackRock anticipated strong demand internally, but the actual outcome surpassed their expectations. One year later, the demand for Bitcoin exposure through IBIT and its international counterparts has surged so aggressively that allocations are approaching $100 billion. Castro characterized this growth as "far beyond what we modeled internally."
The U.S. fund, IBIT, achieved a milestone by crossing the $70 billion mark faster than any ETF in history and now holds over 3% of the total Bitcoin supply. Fee generation has also grown substantially, making IBIT the most profitable ETF launch in BlackRock's history.
Institutions Did the Heavy Lifting
A primary factor contributing to IBIT's success is the nature of the capital inflow. Following the SEC's approval of spot Bitcoin ETFs, pension funds, wealth managers, and corporations that had previously avoided self-custody found a low-friction method to acquire BTC. BlackRock focused its distribution efforts on its existing channels, rather than targeting crypto-native retail investors, and institutions responded positively.
This momentum extended globally, with Brazil's IBIT39 and other Bitcoin-related products developed by BlackRock contributing to the significant asset increase.
Temporary Outflows Don’t Change the Bigger Picture
Recent ETF withdrawals have prompted speculation about a slowdown in demand, but Castro has dismissed this interpretation. He described ETFs as "liquidity machines" designed to absorb selling pressure during periods of volatility. Castro noted that retail investors tend to move their capital more frequently than long-term institutional investors, which is consistent with current market behavior.
BlackRock's internal assessment is that Bitcoin ETFs have established themselves as a permanent business line, not merely a temporary trend.
The notion that Bitcoin would become the strongest profit driver for the world's largest asset manager would have seemed improbable just a few years ago. Today, it is a recognized component of BlackRock's financial performance. This shift indicates that Bitcoin is not only being embraced by Wall Street but is also becoming integral to its core business strategy.