BlackRock's Bitcoin ETF narrowly beats S&P 500 ETF despite much deeper drawdown

BlackRock’s Bitcoin exchange-traded fund (ETF) has narrowly outperformed the S&P 500 since launch despite subjecting investors to a drawdown nearly three times as deep.

The iShares Bitcoin Trust, or IBIT, returned 67.74% from its Jan. 11, 2024 debut through Aug. 31, compared with 66.14% for Vanguard’s S&P 500 ETF, or VOO, on a total-return basis that reinvests dividends.

That left IBIT ahead by just 1.60 percentage points after Bitcoin surged to a record high and then gave back much of those gains during a prolonged downturn.

“Hard to believe IBIT is beating VOO since inception but it’s true,” Bloomberg senior ETF analyst Eric Balchunas wrote Sept. 1, noting that the gap remained narrow.

Balchunas compared IBIT’s path toward a roughly 70% gain to the El Toro roller coaster at Six Flags Great Adventure, while describing VOO’s advance as a walk in the park. He said the result was especially surprising given the bearish mood that dominated Bitcoin from October through July.

IBIT’s narrow lead came with a 53% drawdown

The similarity in headline returns disappears once you consider the path investors took to get there.

IBIT’s worst peak-to-trough decline reached 53.30% between Oct. 6, 2025, and June 30, 2026. VOO’s maximum drawdown over the comparison period was 18.69%, from Feb. 19 through April 8, 2025.

Investors who bought both funds when IBIT launched therefore ended Aug. 31 with broadly similar cumulative returns, but Bitcoin ETF holders had to withstand a decline of more than half from the fund’s peak.

Bitcoin’s price history helps explain much of that gap.

BTC traded near $47,000 when US spot ETFs debuted in January 2024 and later surged to a record high of around $126,000 in 2025 following Donald Trump's election victory. However, its value then fell as low as roughly $58,000 this year before recovering to around $77,000 as of press time.

That reversal erased much of the performance advantage IBIT had built during Bitcoin’s run to record highs.

Nevertheless, that volatility has not stopped Wall Street from building substantially deeper infrastructure around the asset. BlackRock has recommended a 2% BTC allocation for investors seeking diversification and long-term return potential.

Meanwhile, this comparison also pits the two funds at very different stages of maturity.

IBIT, now the largest spot Bitcoin ETF, manages about $60 billion in assets and has accumulated roughly $63 billion of inflows since launch, giving BlackRock’s less-than-three-year-old product a scale few new ETFs have reached.

VOO remains in another league. The Vanguard fund, which tracks the S&P 500 and provides broad exposure to large-cap US equities, crossed $1 trillion in net assets in June 2026, becoming the first ETF to reach that threshold.