Originally published on: July 25, 2024
Asset management giant BlackRock shared insights on the current landscape of cryptocurrency investments, highlighting a strong focus on Bitcoin (BTC) and Ethereum (ETH) among its clients. Speaking at the Bitcoin 2024 conference in Nashville, Tennessee, Robert Mitchnick, BlackRock’s head of digital assets, emphasized the predominant interest in BTC and ETH, with little enthusiasm for other digital assets among investors.
Client Preference for Bitcoin and Ethereum
According to Mitchnick, BlackRock’s clients overwhelmingly prioritize Bitcoin with a secondary interest in Ethereum. The asset manager anticipates minimal interest in cryptocurrencies beyond BTC and ETH within its client base. He indicated that the demand for crypto exchange-traded funds (ETFs) is mainly concentrated on these two core digital assets.
Limited Scope for Crypto ETFs
Despite the growing popularity of crypto investments, Mitchnick expressed skepticism about the proliferation of crypto ETFs beyond Bitcoin and Ethereum. BlackRock recently introduced its first crypto ETFs, namely iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust ETF (ETHA) in January and July, respectively. Mitchnick suggested that the market may not witness a wide variety of crypto ETF offerings in the future.
Divergent Views on Cryptocurrency ETFs
While BlackRock holds a cautious stance on the expansion of crypto ETFs, other asset managers like Franklin Templeton remain optimistic. Franklin Templeton, known for its BTC and ETH ETF products, believes in the potential for additional cryptocurrency ETFs, including offerings related to Solana. The firm sees various exciting developments driving the crypto space forward beyond the dominant Bitcoin and Ethereum.
BTC and ETH as Complementary Assets
Despite the competitive nature of the cryptocurrency market, most of BlackRock’s clients view Bitcoin and Ethereum as complementary rather than competitive assets. Mitchnick noted that clients typically enhance their existing crypto portfolios by adding ETH ETFs, without significantly reducing their BTC holdings. He emphasized the distinct roles of BTC as a store of value and ETH as a platform for diverse applications, reinforcing their complementary relationship in the market.
Future Allocation Predictions
Looking ahead, Mitchnick anticipates investors allocating around 20% of their crypto holdings to Ethereum, while the majority will remain invested in Bitcoin. BlackRock’s crypto ETFs have gained significant traction in the industry, with the iShares Bitcoin Trust (IBIT) managing approximately $22 billion in assets under management (AUM) and iShares Ethereum Trust ETF (ETHA) reaching nearly $270 million within a short period of trading.
Overall, BlackRock’s perspective on the limited interest in crypto ETFs beyond Bitcoin and Ethereum underscores the evolving dynamics of the cryptocurrency market and the varying preferences of institutional investors.
Related: Ethereum ETF sell-off signals more trouble — 10x Research
