BlackRock's Bitcoin ETF Beats S&P 500, but Investors Took a Wild Ride

BlackRock's Bitcoin ETF has been on a wild ride since its launch in January 2024. Despite subjecting investors to a 53% crash, it has narrowly outperformed the S&P 500 index fund. The iShares Bitcoin Trust returned 67.74% from its debut through August 31, compared to 66.14% for Vanguard's S&P 500 ETF.

The similarity in headline returns hides the brutal path investors took to get there. IBIT's worst peak-to-trough decline was a staggering 53.30%, while VOO's maximum drawdown was only 18.69%. Bitcoin's price volatility is largely responsible for this gap, which erased much of the performance advantage IBIT had built during its run to record highs.

Despite this volatility, BlackRock has recommended a 2% allocation to $BTC for investors seeking diversification and long-term return potential. The comparison also highlights the different stages of maturity between the two funds. IBIT is now the largest spot Bitcoin ETF, managing around $60 billion in assets and attracting roughly $63 billion in inflows since launch.

VOO, on the other hand, remains in another league, with over $1 trillion in net assets and a proven track record of stability. The result was especially surprising given the bearish mood that dominated Bitcoin from October 2025 to July 2026.