BlackRock Predicts Low Interest in Crypto ETFs Except for Bitcoin and Ethereum in 2024

July 29, 2024 05:38 PM AEST | By Team Kalkine Media

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BlackRock Predicts Low Interest in Crypto ETFs Except for Bitcoin and Ethereum in 2024 — Image source: shutterstock

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BlackRock's head of digital assets, Robert Mitchnick, has emphasized that clients view Bitcoin (BTC) and Ethereum (ETH) as complementary assets rather than substitutes within their crypto portfolios. Speaking at the Bitcoin 2024 conference on July 25 in Nashville, Tennessee, Mitchnick noted that client interest is predominantly focused on these two leading cryptocurrencies, with minimal enthusiasm for digital assets beyond BTC and ETH.

Limited Interest Beyond Bitcoin and Ethereum

According to Mitchnick, there is “very little interest” among BlackRock's clients in cryptocurrencies other than Bitcoin and Ethereum. This sentiment is reflected in the firm’s approach to crypto exchange-traded funds (ETFs), with expectations set low for the introduction of ETFs featuring other digital assets. BlackRock recently launched its first crypto ETFs, the iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust ETF (ETHA), marking its entry into the crypto ETF space.

Divergent Views on Future Crypto ETFs

Despite BlackRock's cautious stance, other asset managers, such as Franklin Templeton, hold a more optimistic view regarding the expansion of crypto ETFs. Franklin Templeton, which also offers BTC and ETH ETFs, has expressed interest in future products, including potential ETFs for cryptocurrencies like Solana. This perspective highlights the ongoing debate within the asset management industry about the future of crypto investment vehicles.

Bitcoin and Ethereum as Complementary Assets

Mitchnick emphasized that BlackRock’s clients typically see Bitcoin and Ethereum as complementary rather than competitive assets. When investing in Ethereum ETFs, clients usually increase their overall crypto exposure rather than replacing Bitcoin holdings. He pointed out that Bitcoin is perceived as the primary store of value in the crypto space, while Ethereum is seen as a versatile platform for various applications, distinct from Bitcoin’s role.

Future Allocations and ETF Popularity

Looking ahead, Mitchnick anticipates that investors will eventually allocate about 20% of their crypto holdings to Ethereum, with the remaining portion in Bitcoin. BlackRock’s crypto ETFs have gained significant traction, with the iShares Bitcoin Trust amassing around $22 billion in assets under management (AUM) and the iShares Ethereum Trust ETF reaching approximately $270 million shortly after its launch.

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