The new fund offering comes as bitcoin struggles to break out of a bear market, trading around $67,000, down nearly 23% year to date. IBIT, which launched in January 2024, has accumulated approximately $49 billion in assets, making it the largest spot bitcoin ETF on the market. The fund has seen significant outflows since the start of the year, though, amid lower bitcoin prices and excitement in other asset classes, including the highly anticipated initial public offerings (IPOs) of SpaceX ( SPCX ) and Anthropic.

But Jacobs said BlackRock sees several potential audiences for the new fund.

One group consists of income-focused investors who want to diversify away from traditional sources such as dividend-paying stocks and bonds. Others include bitcoin holders who are happy with the cryptocurrency but want to generate cash flow from their positions.

“You can imagine it could be people who have a significant portion of their wealth in bitcoin but want an income stream to support their lifestyle,” Jacobs said.

A third group may be investors who have historically avoided assets like bitcoin or gold because they don’t generate cash flow.

“We’ve encountered these types of investors over the years,” Jacobs said. “How can I own gold in a portfolio if it’s not generating cash in any way? This product tries to help address that market as well.”