The new fund offering comes as Bitcoin struggles to emerge from a bear market, trading around $67,000, down about 23% year to date. IBIT, which debuted in January 2024, has accumulated nearly $49 billion in assets, making it the largest spot Bitcoin ETF on the market. However, the fund has seen significant outflows since the start of the year, amid falling bitcoin prices and excitement around other asset classes, including the highly anticipated initial public offerings (IPOs) of SpaceX (SPCX) and Anthropic.
But Jacobs said BlackRock sees several potential audiences for the new fund.
One group is income-oriented investors who seek to diversify beyond traditional sources such as stocks and dividend-paying bonds. Another includes Bitcoin holders who remain bullish on the cryptocurrency but want to generate cash flow from their positions.
“You might imagine these to be people who have a significant portion of their wealth in Bitcoin but would like to have an income stream to support their lifestyle,” Jacobs said.
A third group may be investors who have historically avoided assets such as bitcoin or gold because they do not produce cash flow.
“We’ve been seeing this type of investor for years,” Jacobs said. “How can I hold gold in a portfolio if it doesn’t generate liquidity in one way or another? This product aims to cater to that market as well.”
