The iShares Bitcoin Trust (IBIT) ETF has become the most successful fund as its assets surged to over $86 billion in less than 24 months. It has also become the eighth biggest BlackRock fund and the most profitable, thanks to its 0.25% expense ratio.
Harvard University and Brown Have Bought IBIT ETF
A major Bitcoin ETF news today, August 8, is that Harvard and Brown Universities have bought the IBIT ETF. Harvard’s endowment fund now holds IBIT stock worth $126 million, while Brown owns $14 million. They are now part of the 1,300 holders of the fund.
In a statement, Eric Balchunas, a senior ETF analyst at Bloomberg, said that their acquisition is notable because endowments are the “hardest institutions to hook.”
These investments are tiny considering the size of their endowments. Harvard’s endowment has over $53 billion in assets, while Brown has $7.2 billion, figures that are continually growing.
However, they are significant because they show that Bitcoin is becoming a mainstream alternative asset. Additionally, the investments could prompt other endowment funds to invest some of their funds in Bitcoin ETFs, a notable development given that the top 15 US universities have nearly $400 billion in assets.
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BlackRock’s Bitcoin ETF is Not the Best
The IBIT ETF has become the biggest fund in the crypto industry, accounting for 57% of the total assets. However, a closer look at the fee structure shows that IBIT was not the best ETF for Harvard and Brown to buy.
IBIT has an expense ratio of 0.25%, meaning that Harvard will pay a $312,500 annual fee to BlackRock. A better choice would have to invest in the Grayscale Mini Bitcoin ETF (BTC), which has $5.4 billion in assets and an expense ratio of 0.15%, costing Harvard just $187,500 with its recent investment. The two funds track the same asset and use Coinbase as the custodian.
They are also highly liquid funds. IBIT’s daily traded shares on Thursday were 28.9 million, while BTC had over 1.05 million, meaning that it is not illiquid. Additionally, BTC is cheaper than IBIT, with a 0.08% premium compared to IBIT’s 0.69%.
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