"A Bitcoin ETF lets investors gain exposure to Bitcoin without actually buying or storing the cryptocurrency themselves. Instead, the fund holds Bitcoin (or Bitcoin-related contracts) while investors simply buy shares on a stock exchange, with the share price moving alongside Bitcoin's market value. Being a regulated financial product, it provides a safer, more accessible way to invest in Bitcoin through familiar brokerage accounts."
"The fund's meteoric rise underscores a broader shift in investor behavior. Bitcoin itself hit a new all-time high of $126,200 on Monday, fueling inflows into IBIT. Market conditions are playing a critical role: declining U.S. interest rates, combined with a weakening dollar amid the ongoing government shutdown, are driving investors to seek alternative stores of value. ETFs tracking digital assets like Bitcoin have emerged as a natural destination for capital in this climate."
BlackRock's iShares Bitcoin Trust ETF (IBIT), launched 21 months ago, is approaching $100 billion in assets under management and has become the firm's most profitable fund. IBIT currently generates roughly $244.5 million in annual revenue and last quarter overtook Coinbase Global's Deribit to become the world's largest venue for Bitcoin options. The ETF structure allows investors to gain Bitcoin exposure without owning or storing the cryptocurrency by holding Bitcoin or related contracts and trading shares. Recent market forces—Bitcoin's record price, declining U.S. interest rates, and a weakening dollar amid a government shutdown—have driven substantial inflows, with each 1% Bitcoin price rise adding nearly $1 billion to IBIT's assets.
Read at Bitcoin Magazine
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