US Crypto ETFs Pull Bitcoin Investors Toward TradFi Products

TLDR

• BlackRock says about 75% of IBIT investors had never owned an ETF before.
• The iShares Bitcoin Trust (IBIT) has become an entry point for many first-time ETF investors.
• Many IBIT investors later purchased BlackRock’s S&P 500, AI, and gold-focused funds.
• IBIT currently manages around $48 billion in assets and holds 765,936 BTC.
• BlackRock launched the iShares Bitcoin Premium Income ETF (BITA) this week.

BlackRock says its spot Bitcoin ETF is attracting investors who had never used exchange-traded funds before. The asset manager reported that many of these investors later expanded into traditional investment products. Jay Jacobs, BlackRock’s US head of equity ETFs, shared the details during a recent interview with Cointelegraph.

Crypto ETFs Bring New Investors Into BlackRock’s Broader Fund Range

Jacobs said roughly 75% of investors in the iShares Bitcoin Trust ETF had never owned an ETF before. He explained that the fund created an entry point for people seeking digital asset exposure. As a result, many investors started their ETF journey through Bitcoin rather than traditional stock products.

The iShares Bitcoin Trust launched in January 2024 and remains BlackRock’s primary crypto offering. The fund currently manages about $48 billion in assets. It also holds 765,936 BTC, making it one of the largest spot Bitcoin ETFs.

Speaking on Cointelegraph’s Chain Reaction podcast, Jacobs described the product as a new engagement channel. He said, “IBIT was a way for traditional investors to now get into digital assets.” He also stated that many participants entered exchange-traded products through digital asset investments.

According to Jacobs, investor activity often extends beyond Bitcoin after initial exposure. He said many clients later purchase other BlackRock products. These products include the iShares Core S&P 500 ETF, artificial intelligence-focused funds, and gold investment products.

BlackRock also expanded its crypto lineup this week. The company launched the iShares Bitcoin Premium Income ETF, known as BITA. The product generates income through covered call strategies linked to Bitcoin holdings.

BlackRock Points to Growing Links Between Crypto and Traditional Finance

Jacobs said BlackRock views the relationship between crypto and traditional finance as increasingly connected. The firm refers to this trend as the “Great Convergence.” He explained that investors now seek broader portfolio solutions across multiple asset classes.

He added that investors often viewed DeFi and TradFi as competing systems. However, he argued that market participants now focus more on combining different investment approaches.

He also said investors may increasingly consider TradFi and DeFi together within portfolio strategies.

Recent trading activity has reflected this overlap between markets. Earlier this month, crypto traders gained access to SpaceX-linked exposure through tokenized shares and pre-IPO perpetual futures. These products allowed market participants to trade exposure before public stock market listings.

Pre-IPO perpetual futures give traders access to private company valuations before exchange debuts. Major cryptocurrency exchanges now offer these products. Trading activity has expanded rapidly across the sector.

Data from CryptoQuant showed pre-IPO perpetual futures volume rose from about $1 billion in early May. The figure later reached roughly $22 billion. CryptoQuant also identified Binance as the largest venue for this trading activity.

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