BlackRock's Bitcoin FOMO Game: From Passive Tracking to Steady Harvest

You may have heard of BlackRock, the financial giant managing $9 trillion in assets, which recently became the market focus due to its Bitcoin spot ETF product, IBIT. Interestingly, people often use the term “leek” to mock investors who buy high and sell low. But what if I told you that the true “leek game” designer might not be BlackRock itself?

Current market data shows BTC around $67,320 (up from the original $67,106), ETH at $2,030, and BNB at $622.60. Behind these numbers lies a financial mechanism that many overlook.

IBIT’s Passive Tracking Mechanism: Why BlackRock Must “Buy High and Sell Low”

IBIT is essentially a passive tracking ETF, designed not to beat the market but to closely follow Bitcoin’s price movements. This determines its unavoidable fate: passively following capital flows.

What happens when a large number of investors are bullish on Bitcoin and rush to buy IBIT? BlackRock must immediately purchase an equivalent amount of real Bitcoin to keep IBIT’s price in sync with BTC. The most common scenario for this is when market sentiment is high and prices are at a peak. Conversely, when investors panic and redeem IBIT, BlackRock has to sell Bitcoin at low prices.

On the surface, this looks like BlackRock engaging in classic “buy high and sell low” losses. But if you think carefully, you’ll realize this is a perfect mirror of the collective chasing and dumping behavior of countless retail investors. BlackRock isn’t fighting the market; it’s following the collective actions of market participants.

Management Fees Are the Real Profit Engine

This is the key point. BlackRock’s profit from IBIT doesn’t come from Bitcoin price fluctuations but from annual management fees. IBIT’s management fee rate is about 0.25%. It may seem small, but when scaled up, the numbers become significant.

Suppose IBIT manages $100 billion in Bitcoin assets; just from management fees alone, it earns $250 million annually. More importantly, regardless of Bitcoin’s price swings, as long as the asset size remains at this level, BlackRock’s fee income won’t decrease. Even if Bitcoin halves in value, as long as there are enough trading participants, BlackRock’s steady revenue stream persists.

Capital Flows and Fee Collection: A Game of Strategy

Let’s break down this model further. When retail investors chase high, they buy IBIT → BlackRock collects subscription fees; when they panic and redeem, BlackRock collects redemption fees; even if they hold long-term, BlackRock still earns management fees annually.

To sum up this mechanism in one sentence: No matter how the market fluctuates, BlackRock keeps collecting money.

The brilliance of this design is that it completely subverts the traditional financial concept of “risk.” The existence of IBIT turns BlackRock from a passive price fluctuation absorber into an active fee collector. The bigger the market swings and the more frequent the trades, the more retail investors “take losses,” and the more opportunities BlackRock has to charge fees.

The True Winner in Financial Markets

This is why the old financial adage says, “The people who sell shovels make the most money.” In every boom and bust cycle, the most stable profits never come from correctly predicting price directions but from controlling the trading infrastructure itself.

As the world’s largest asset manager, BlackRock has become this “shovel seller.” Whether you are bullish or bearish on Bitcoin, when you choose to invest via IBIT, you are effectively a variable in BlackRock’s fee mechanism. Your greed and fear, your chasing highs and selling lows, your entry and exit—all are converted into a continuous revenue stream for BlackRock.

So next time you see comments about BlackRock “buying at the top and selling at the bottom,” consider a different perspective: perhaps BlackRock isn’t losing money, but millions of retail investors are paying for BlackRock’s stable income with their own trading behaviors. The true game-changer isn’t price volatility itself but the institutions controlling the trading infrastructure.