IBIT beats VOO with 14.6% return

BlackRock’s iShares Bitcoin Trust (IBIT) is now outperforming Vanguard’s S&P 500 ETF (VOO), a rare milestone that underscores the growing acceptance of bitcoin as a mainstream investment. IBIT, which launched in January, has delivered a 14.6% return year-to-date compared to VOO’s 13.9%. This marks the first time a bitcoin ETF has beaten the market’s most popular index fund over the same period.

The shift reflects a broader trend: institutional investors are increasingly treating bitcoin as a core portfolio asset rather than a speculative bet. BlackRock’s entry into the spot bitcoin ETF market in January, followed by Fidelity and others, legitimized the product for conservative allocators. Meanwhile, the S&P 500’s strong run this year—fueled by big tech—has been uneven, while bitcoin has surged 60% in 2024 amid expectations of easier Federal Reserve policy and potential spot ETF approvals in other countries.

IBIT now holds over $18 billion in assets, making it the second-largest spot bitcoin ETF after Grayscale’s converted fund. Analysts say its lower fees—0.25% versus Grayscale’s 1.5%—and efficient creation/redemption process are driving inflows. VOO, by contrast, has seen modest outflows this year as investors rebalance into riskier assets.

The next test comes with the Fed’s policy meeting next week. If rate cuts are signaled, both bitcoin and equities could gain further. But if inflation stalls, bitcoin’s volatility could return quickly. Either way, the outperformance of IBIT over VOO signals that bitcoin is no longer just an alternative bet—it’s a serious contender in diversified portfolios. That’s a quiet revolution in modern finance.