A Bitcoin ETF doubled in value. Its investors made only one-fourth of that

If you’d made a lump-sum investment in US listed iShares Bitcoin Trust ETF IBIT at the time of its Jan. 5, 2024, inception, you’d be sitting pretty. Even after the recent selloff, the exchange-traded fund earned nearly 46% per year through Nov. 26, 2025, tracking the cryptocurrency’s ascent.

Of course, investors didn’t all pile in on day one and double their money. Rather, they came on their own timetable, investing varying amounts, in the months that followed: All told, investors pumped around $63 billion into the ETF through Nov. 26, 2025.

Dollar-weighted return

Given that, the question becomes how those investors fared as a group once we account for the timing and magnitude of the purchases and sales they made over that period.

To address that, I compiled the ETF’s daily assets and net flows from its inception through Nov. 26, 2025. Using that data, I estimated that investors’ average dollar gained about 11.2% per year. While that’s good in absolute terms, it’s a fraction of the ETF’s 46% total return over that period, the shortfall owing to mistimed purchases and sales.

(See the “Appendix” for further detail on the net asset and estimated daily net flow data that I incorporated to derive the dollar-weighted return estimate above.)

To put that 11.2% annual dollar-weighted return in perspective: Cash earned 4.7% per year over this span; investment-grade US bonds 5.3% annually; US stocks 23.3% a year; and the US 60% stocks/40% bonds portfolio 15.7% per year.

Understanding the gap

What explains the large gap between the ETF’s total return and its dollar-weighted return? The ETF bagged its biggest gains before the bulk of investors’ assets flowed in. You can see that in the following table, in which I estimate the ETF’s aggregate return in dollars by its asset size at the relevant times.

(See the “Appendix” section for further details on how I derived the estimated gain (loss) figures above.)

The ETF made nearly 60% of its dollar gains (around $4.2 billion) in the first 66 days of its life, during which it gained more than 65%. Its daily net assets averaged around $4.8 billion during this period. It’s made around $3 billion in the days since, but that was spread across a much larger asset base ($49.2 billion in average daily net assets), reflecting the ETF’s less meteoric return over that span (around 24% cumulatively, or 13.2% per year).

To further illustrate how timing affected the return of the average dollar, I also estimated the ETF’s dollar-weighted returns from its Jan. 5, 2024, inception through Jan. 5, 2025, and at one-month intervals thereafter (that is, from inception through Feb. 5, 2025, inception through March 5, 2025, and so forth). You can find those estimated dollar-weighted returns for each period, and the corresponding total return, in the chart below.

Even from the earliest period—inception through Jan. 5, 2025--there was a nearly 21-percentage-point shortfall between the ETF’s total return and the average dollar’s return. This reflects the early burst in returns in its first few months of existence, before flows surged. The gap stayed wide over the forward-extended periods (longest being inception through Nov. 26, 2025), during which total returns moderated while assets kept flooding in.

Caveats

We spoke to representatives of the iShares ETF’s manager, BlackRock, about the apparent gap between the ETF’s estimated dollar-weighted and total returns. They cited three factors that in their view could either explain, or mitigate, that difference.

The first is access: At the ETF’s inception, it wasn’t approved for use on some of the major direct brokerage or financial advisor platforms. Thus, while the ETF quickly grew out of the gates, there remained pent-up demand that drove a continued influx over the last two years as the ETF gained additional approvals, making it more accessible to a wider audience.

Second is the growth of derivatives and multiple-leg trades, where large institutional investors use the ETF to arbitrage price differences between bitcoin futures and spot bitcoin or use the ETF to hedge options positions as derivatives and structured notes referencing iShares Bitcoin Trust ETF soared. While such trades can appear uneconomic if you view just one leg. (that is, longing the ETF), they can confer profits to these institutions in total, or hedge risks.

Third are in-kind transfers, in which large holders of physical bitcoin exchange it for shares of the ETF. The ETF was approved for these transfers in July 2025 and since then has conducted exchanges worth over $3 billion with various large crypto investors. In these instances, the ETF’s dollar-weighted return would convey the return those investors captured after exchanging physical bitcoin for the ETF, but not the return on their physical bitcoin before the exchange.

(It’s worth noting that the second and third factors wouldn’t apply just to this ETF, but any other scenario in which the dollars originated from, or went to, vehicles other than mutual funds and ETFs. In those circumstances, we would have visibility into the fund or ETF’s dollar-weighted returns, but not the other vehicle that was the source of, or destination for, asset flows.)

Takeaways

The ETF has done its job--it has tracked bitcoin almost perfectly and thus notched excellent total returns since inception. The problem is investors appear to have arrived late to the party--after the ETF spurted to a big gain in the first few months of its life--and that’s held back their average dollar’s return, caveats notwithstanding.

Those investors can’t very well be called skittish: The ETF has received positive net flows on 80% of trading days since inception, meaning investors have come and largely stayed put. But the large gap between the ETF’s dollar-weighted and total return underscores the importance of staying the course. If current investors do so, their average dollar’s return should gradually converge toward the ETF’s total return. If not, it will likely continue to lag.

It’s also a reminder to be wary of narratives. The ETF’s launch was heralded as a milestone in the “democratization” of crypto markets, with some arguing the surge of assets from retail investors would push bitcoin’s price higher still. While bitcoin has indeed risen in the time since, it saw its biggest gains in the ETF’s infancy, before it had amassed a lot of assets. That doesn’t make the narrative wrong, per se, but shows that you can get the story’s broad arc right and still mistime the investment.

Appendix

The following table provides the net assets and estimated daily net flow figures incorporated into my estimate of iShares Bitcoin Trust ETF’s dollar-weighted return from its Jan. 5, 2024, inception through Nov. 26, 2025.

The estimated daily net flows incorporated into the calculation sum to figures that closely approximate what BlackRock reported in its quarterly Securities and Exchange Commission filings from inception through Sept. 30, 2025 (the date of its most recent periodic report), as shown below.

Similarly, my estimates for how much investors made (or lost) in dollar terms over time matched what BlackRock reported in aggregate, albeit with some quarter-to-quarter timing differences. All told, I estimated that shareholders had amassed $26.8 billion in net income and gains from its Jan. 5, 2024, inception through Sept. 30, 2025, which nearly matched what BlackRock reported ($26.9 billion).

Links to iShares Bitcoin Trust ETF’s quarterly SEC filings

• 10-Q (as of March 31, 2024)
• 10-Q (as of June 30, 2024)
• 10-Q (as of Sept. 30, 2024)
• 10-K (as of Dec. 31, 2024)
• 10-Q (as of March 31, 2025)
• 10-Q (as of June 30, 2025)
• 10-Q (as of Sept. 30, 2025)

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