Why are retail investors always being harvested by BlackRock's IBIT? This is the truth.

Have you noticed that recently, the investment community has been buzzing about a major development—BlackRock, the global financial giant managing over $9 trillion in assets, has launched a Bitcoin spot ETF (ticker IBIT). Its asset size has surpassed Grayscale’s GBTC, making it the world’s largest Bitcoin spot ETF. Interestingly, many retail investors have observed that BlackRock seems to be “buying high and selling low,” which looks like typical retail behavior. But the truth is much more complex than it appears.

Passive Tracking Isn’t Stable Profit—The Real Logic Behind IBIT

First, understand a key concept: BlackRock’s IBIT is essentially a passive Bitcoin ETF. Its core purpose isn’t to predict Bitcoin’s rise or fall to profit from price differences, but to faithfully track Bitcoin’s price. It sounds simple, but the operational logic hides some financial secrets.

What happens when a large number of retail investors are attracted by Bitcoin’s rally and rush into IBIT to buy? BlackRock has no choice but to immediately buy real Bitcoin to support these new inflows. The timing of these purchases is exactly when investors are most excited, market enthusiasm peaks, and Bitcoin prices are at their highest. On the surface, it looks like BlackRock is “buying high.”

Conversely, when retail investors panic and redeem large amounts of IBIT, BlackRock is forced to sell large amounts of Bitcoin to cash out. This selling often occurs when investors are most desperate, confidence is lowest, and prices are at their lowest. On the surface, it appears BlackRock is “selling low.”

It may seem like BlackRock is performing a tragic “buy high, sell low” act, but in reality, it’s just a passive follower of collective retail decisions—a mirror perfectly reflecting market greed and fear.

How Retail Panic and Greed Continuously Generate Management Fees

This is the real key. BlackRock doesn’t care about Bitcoin’s price movements—because, relative to managing such a huge asset base, the volatility of a single coin is insignificant. BlackRock’s focus is on one thing: management fees.

IBIT’s annual management fee rate is only 0.25%. It sounds low, but when scaled to hundreds of billions of dollars, it becomes astronomical. Suppose $100 billion flows through IBIT for Bitcoin trading; BlackRock can earn $250 million annually just from management fees. This income has nothing to do with Bitcoin’s price—whether Bitcoin halves or doubles, as long as the funds stay in IBIT, management fees keep flowing into BlackRock’s account.

Even better, BlackRock’s revenue streams are not limited to management fees:

• When retail investors buy high → BlackRock collects subscription fees + management fees
• When retail investors panic and redeem → BlackRock collects redemption fees + management fees
• When retail investors hold long-term → BlackRock still earns management fees

No matter how the market fluctuates, BlackRock ensures profits. This is the “winning twice every time” secret.

From “Buy High, Sell Low” to “Always Win Twice”—BlackRock’s Perfect Loop

In reverse, BlackRock doesn’t need to be a market predictor or manipulator. It only needs to build a massive financial container that attracts more and more capital. Regardless of how these funds flow inside, it can extract fees from the entire process. This is a classic “selling shovels” business model—not making money from mining (trading), but from providing tools.

Retail investors are precisely the continuous fuel. Every buy high, every sell low, every hesitation to sell or hold—each action adds to BlackRock’s management fee revenue.

You might ask: Will BlackRock lose money if Bitcoin drops? The answer is simple—its profit model is completely independent of Bitcoin’s price direction. Even if Bitcoin drops to $1, as long as retail investors are trading, BlackRock still makes money.

This isn’t because BlackRock is particularly clever; it’s inherent in the passive fund business model. It transforms investor risk management fees into revenue, balancing its own risk by managing the funds of many participants.

Next time you see BlackRock’s “buy high, sell low” trading data, don’t mock its “stupidity.” In fact, BlackRock is your trading counterpart—a systemic, scaled-up trading partner—using your greed and fear, your chasing and panic selling, to steadily harvest management fees. It’s like an ever-working broker, profiting from every retail trader’s impulse.

In the financial world, the most stable returns always belong to those providing liquidity channels, not those trying to predict market directions.

Real-time Market Data
(Data as of 2026-02-27)

• BTC Price: $65,570, 24h Change -2.07%
• ETH Price: $1,930, 24h Change -3.56%
• BNB Price: $611.20, 24h Change -1.31%