BlackRock's Bitcoin ETF Draws Traditional Investors into Crypto

BlackRock's Bitcoin ETF has become an entry point for investors who had never owned an exchange-traded fund (ETF) before, said Jay Jacobs, the firm's US head of equity ETFs. In a recent podcast appearance, he shared data showing that about 75% of investors in BlackRock's iShares Bitcoin Trust ETF (IBIT) had no prior ETF exposure.

This is a significant trend, with Jacobs describing it as the 'Great Convergence' between traditional finance and decentralized finance. Assets historically held separately are now being combined as investors seek more complete portfolio solutions.

The overlap between TradFi and DeFi is evident in the fact that IBIT has $48 billion in assets under management and 765,936 BTC. This has also led to a surge in pre-IPO trading volume, which rose from around $1 billion in early May to roughly $22 billion.

Jacobs noted that investors who gain exposure through IBIT often go on to buy other BlackRock funds, including the S&P 500 fund IVV and the gold fund IAU. He also highlighted the launch of the iShares Bitcoin Premium Income ETF (BITA), which seeks to generate income by writing covered call options on IBIT shares.