Why I Bit At IBIT

Image Source: Freepik
 

I have no position in iShares Bitcoin Trust  ETF (IBIT) currently, but I did buy some for the first time last week and exited it profitably. The ETF, run by iShares, which is part of BlackRock, has $50 billion in assets under management, is down 25.4% to start 2026 after falling 6.4% in 2024 from its launch date in January. In this piece, I explain why I care about it and why speculators and perhaps investors should pay attention to IBIT.
 

What IBIT Is

iShares launched IBIT in early 2024, and the ETF, which closed at $37.05, has plunged recently. On the iShares website, the IBIT page indicates that the Bitcoin amount is 22.68, suggesting that the ETF trades near its net asset value. The management fee is 0.25%. IBIT trades a lot of shares, with a 30-day average of 86.3 million shares per day.

This is a pretty simple ETF, with just one asset in it. iShares published a Fact Sheet as of 12/31 for those who want to learn more. The price has plunged since then, and the number of shares outstanding has come down just a bit.
 

How IBIT Has Plunged

IBIT posted an all-time high of $71.82 on 10/6, and the six-month chart shows the collapse since then:
 

(Click on image to enlarge)

A gap in trading left behind in mid-November was filled in mid-January, when IBIT was up year-to-date, but the plunge since then has included four gaps that remain open. I bought some on 2/5, paying above $39 initially but buying as low as $35.60. I exited it on 2/6 ahead of the gap left behind on 2/5, but this gap never filled. This was my first interaction with IBIT or anything Bitcoin-related, though I have been watching Bitcoin for a while.

For those looking for gaps to get filled potentially, I believe that it could fill the past two gaps and test resistance at $47. A move from $37.05 to $47 would be a gain of 26.9% higher. The $47 level would leave IBIT still more than 5% below where it ended 2025 ($49.65).

I would like to have some sort of fundamental valuation to drive my view, but I do not. Looking at the all-time high in IBIT and the recent low, a 38.2% Fibonacci retracement would get the ETF to $49.25, a bit higher than the $47 level I see has potential resistance but still down year-to-date.
 

Comparing IBIT to Other Investments

I think that all of the interest in precious metals is relevant. I have been concerned about the big run-ups in gold, silver, and gold miners, and the collapse in Bitcoin and in IBIT strikes me as odd. I have always understood the inflationary protection offered by gold, and it seems like Bitcoin would do so as well. The interest in gold and precious metals has not been due solely to inflationary concerns, which are very valid in my vie,w given the massive federal debt. Gold benefits from concerns about the geopolitical stability and central bank buying. Bitcoin does not benefit from these goals. Until recently, the price of Bitcoin was trailing gold and silver, but the recent collapse of Bitcoin has left its five-year return much lower than the precious metals and the miners:
 

If one looks back a little bit further, Bitcoin leads the way still, but it is up considerably less since the end of 2023 and is down since the end of 2024. Going back to the elections in November, Bitcoin today is actually slightly lower than it was then.

I don't follow these companies, but IBIT can be compared to Strategy, Inc. (MSTR) and Coinbase Global (COIN). MSTR is a company I used to know better and is known for its CEO, Michael Saylor, who pivoted the company to a strategy of aggressive Bitcoin acquisition.COIN is the largest platform for crypto assets. These two investments have market caps of $38 billion for Coin and $41 billion for MSTR, similar to the large-cap size of IBIT at $50 billion. Here is the action in them since IBIT began trading in early 2024:
 

These three large-caps have been moving similarly recently, with all down more than 35% over the past three months.. Since the elections in 2024, all are down too, with MSTR leading the way at -46.0%, COIN at -22.3%, and IBIT down 6.2%.
 

Conclusion

I am no huge fan of Bitcoin, but I do like good investments. Will IBIT be a good investment? It's hard to tell, in my view, but Bitcoin is very volatile and is beaten up badly. Given my negativity on precious metals and my positioning in my investments, IBIT could offset some of the risk I am taking. I am on the sidelines now, but watching extremely closely.

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