IBIT: A Simple Way To Play Bitcoin

Summary IBIT is the largest Bitcoin ETF in the market, offering easy access to Bitcoin’s upside amid favorable regulatory changes and market optimism. Bitcoin’s dominance and recent all-time highs, fueled by supportive GENIUS Act legislation, make IBIT a compelling vehicle for cryptocurrency exposure. IBIT’s strong historical performance and low expense ratio add to the appeal of the Bitcoin ETF. Key risks include crypto volatility and potential outflows during risk-off periods, but IBIT remains an excellent low-cost choice for bullish Bitcoin investors. BlackRock’s iShares Bitcoin Trust ETF ( IBIT ) is a publicly-traded Bitcoin ( BTC-USD ) ETF, the largest in its category, with a strong historical net asset value record and a low expense ratio, allowing investors to participate in Bitcoin’s recent bull-run. The ETF is a cost-efficient way for investors to get exposure to the world’s largest digital currency which continues to dominate the cryptocurrency market. Recently we have seen favorable stablecoin legislation with the GENIUS Act that resulted in new investor optimism with regards to digital assets, specifically Bitcoin and Ethereum ( ETH-USD ). Bitcoin also reached multiple new all-time highs lately which has put the digital currency back on the map for investors. Data by YCharts Previous rating I did not cover the iShares Bitcoin Trust ETF in the past, but I have had a very favorable opinion on Bitcoin for a very long period time . In fact, only recently did AI GPU maker Nvidia ( NVDA ) replace my Bitcoin holding as the largest position in my portfolio. I also covered Coinbase Global ( COIN ), a leading U.S.-oriented trading platform for cryptocurrencies, which I continue to rate as a buy, chiefly due to rising institutional adoption. Further, favorable regulation in the form of the GENIUS Act lifted up the price of Bitcoin to new all-time highs lately. Bitcoin continues to dominate the market, GENIUS Act legislation legitimizes the world’s #1 cryptocurrency Currently, the Bitcoin price is hovering around $123,000 and has seen a series of consecutive all-time highs in the last month. Bitcoin is the number one global currency by market capitalization as well as market dominance. The outstanding supply of Bitcoins is currently worth $2.4T and Bitcoin represents approximately 60% of the entire cryptocurrency market. Coin Market Cap Recently, U.S. congress made a concerted effort to make America the capital for crypto investors in the world. This drive has led to the passing of the so-called GENIUS Act , a specific piece of legislation that regulates stablecoin issuers and lays out a regulatory framework for companies that issue them. Stablecoins are key to the cryptocurrency market as they provide investors with an opportunity to exit volatile cryptocurrency positions and park money safely on the sidelines. The GENIUS Act has led to renewed interest in cryptocurrencies and with Bitcoin flirting with new all-time highs, the iShares Bitcoin Trust ETF could be a vehicle for investors to invest in the world’s biggest cryptocurrency. A key driver for Bitcoin is growing cryptocurrency adoption in both retail and institutional markets. In my last work on Coinbase — A Directional Bet On Bitcoin — I highlighted the importance of Bitcoin for trading platforms as a main driver of revenue and income growth. In the first-quarter, Bitcoin represented 27% of Coinbase’s trading volume and 26% of its transaction revenue, highlighting the cryptocurrency’s dominating position in the cryptocurrency market. The GENIUS Act could further accelerate especially institutional interest in Bitcoin, as well as other digital assets, which in turn could boost the cryptocurrency’s dominance in the market. Companies like Strategy ( MSTR ) are also aggressively raising capital to make more Bitcoin purchases which, given the limited supply of Bitcoin, could be a catalyst for the cryptocurrency’s price as well. Coinbase The iShares Bitcoin Trust ETF is the largest ETF in the crypto universe with investable assets of ~$86.0B which makes it about 3.6X larger than the second-largest Bitcoin ETF, the Fidelity Wise Origin Bitcoin Fund ( FBTC ), and 4.0X larger than the Grayscale Bitcoin Trust ETF ( GBTC ). IBIT owns a total of 738,000 Bitcoins and therefore offers investors a direct way to invest in the growth, not only of Bitcoin, but of the entire cryptocurrency universe. The iShares Bitcoin Trust ETF also has a very competitive expense ratio of 0.25% annually, compared to 0.25% for the FBTC and 1.5% for the GBTC. Data by YCharts So far, the iShares Bitcoin Trust ETF has done a decent job in growing investors’ investment: A $10,000 investment made at the beginning of 2024 would have grown to about $25,000 today, representing a 2.5X factor increase (~150% gain). Further, with the regulatory environment turning profoundly more pro-crypto with the passing of the GENIUS Act, I believe Bitcoin is in a position to achieve new record highs in the second half of 2025. iShares Bitcoin Trust ETF Investment returns: IBIT vs. FBTC vs. GBTC The iShares Bitcoin Trust ETF has put up strong performance numbers since inception in 2024, and it has done slightly better than its main ETF rivals. The iShares Bitcoin Trust ETF has been so far very effective in representing the underlying price development of Bitcoin (see chart below). Since the iShares Bitcoin Trust ETF is the largest ETF of its category, it does not only offer investors a competitive expense ratio, but also a very high degree of liquidity. Data by YCharts Risks with IBIT The biggest risk with the iShares Bitcoin Trust ETF is that the ETF may lose assets if the cryptocurrency market went into a tailspin or a longer-lasting correction. Capital invested in crypto ETFs may flee quickly in the event of a price draw-down which could further pressure Bitcoin prices. If cryptocurrencies like Bitcoin drop out-of-favor with investors, they may see a serious net asset value drop and suffer a period of significant under-performance compared to other asset classes. Final thoughts The iShares Bitcoin Trust ETF is an excellent investment product for investors that look for low-cost exposure to the world’s biggest and most dominant cryptocurrency. Currently, the cryptocurrency market also experiences a significant change in investor sentiment following the passing of the GENIUS Act and an improved regulatory landscape that legitimizes stablecoin issuers and the cryptocurrency ecosystem more generally. With Bitcoin reaching a series of new all-time highs in the month of July, I believe this is still a good time to invest in the most-trusted digital currency available, and potentially play a continual upside breakout. In my opinion, the iShares Bitcoin Trust ETF has done an excellent job of mimicking the performance of the underlying Bitcoin price since its inception and I consider IBIT a great alternative to owning Bitcoin outright.

Source: Seeking Alpha