BlackRock discloses $32 million in Q1 earnings from Bitcoin IBIT ETF in recent SEC report.

The recent quarter has proven significant for BlackRock’s Shares Bitcoin Trust ETF (IBIT), featuring new custodians, fluctuations in Bitcoin prices, an evolving regulatory environment, and a president supportive of Bitcoin.

In its most recent quarterly report, BlackRock disclosed net assets totaling $47.78 billion at the close of Q1 2025, down from $51.52 billion in the prior quarter.

This drop corresponds with an 11.15% decline in Bitcoin’s price during the same timeframe, underscoring the ETF’s close relationship with Bitcoin’s market movements.

Despite the downturn in Bitcoin’s valuation affecting net asset value (NAV), the underlying demand for the Trust stayed strong. There was an excess of 43 million shares issued compared to those redeemed over the quarter.

The total outstanding shares reached 1.013 billion, demonstrating a continued interest from institutional investors amid market fluctuations. The NAV per share declined from $53.09 to $47.14.

The highest NAV recorded in Q1 was $60.61 on January 21, while the lowest observed point was $44.62 on March 10.

However, as of the latest updates, IBIT is priced at $56 in pre-market trading as Bitcoin strives to approach the $100,000 mark.

Operational expenses for the quarter remained relatively low when compared to the asset size. The total of sponsor fees amounted to $33.04 million. The fee waiver extended by BlackRock for the initial $5 billion in assets under management at a reduced rate of 0.12% cost the Trust $178,082 during the quarter, though this waiver ended in January 2025.

Transforming landscape for Bitcoin ETFs

Throughout the quarter, Coinbase Custody continued as the principal Bitcoin custodian for the Trust. Nonetheless, BlackRock broadened its custody strategy in April 2025 by appointing Anchorage Digital Bank under a new agreement for custodial services.

This adjustment aims to enhance security by reducing counterparty and operational risks, particularly given the regulatory scrutiny faced by Coinbase. Importantly, the SEC’s case against Coinbase was dismissed in February 2025, alleviating some legal uncertainties regarding the Trust’s main service provider.

Concerns regarding market structure also emerged in the report. BlackRock indicated that Bitcoin sales to facilitate share redemptions resulted in realized gains of $624 million, showcasing the Trust’s liquidity efficiency.

However, the report highlighted substantial regulatory and security concerns, including the risk of custody losses, potential market manipulation, and shifts in global regulations. U.S. initiatives, such as an executive order from President Trump in March 2025 to create a “Strategic Bitcoin Reserve” and anticipated congressional efforts to acquire 1 million Bitcoin over five years, were mentioned as possible market influencers and challenges.

Liability limitations surround the Trust’s custodial and counterparty relationships. The insurance held by Coinbase and Anchorage may not fully cover situations of extreme loss.

The ETF’s adaptability to ongoing regulatory developments remains pivotal. The report noted increasing scrutiny from both U.S. and international authorities, including proposed rules from FinCEN concerning digital asset mixers and ongoing enforcement actions from OFAC, which could influence liquidity and access to the market.

In summary, IBIT’s quarterly findings reflect a blend of strong inflows and market-induced NAV compression, while providing a comprehensive understanding of how BlackRock navigates structural, regulatory, and operational challenges in the realm of digital assets.