BlackRock foresees 'very little interest' in crypto ETFs beyond Bitcoin, Ethereum — Bitcoin 2024

Clients see Bitcoin and Ethereum as complements, not substitutes, in crypto portfolios, according to Blackrock’s head of digital assets.

Asset manager BlackRock sees “very little interest” among clients in crypto beyond Bitcoin (BTC) and Ethereum (ETH) and doesn’t foresee many crypto exchange-traded funds (ETFs) outside of those two core digital assets, according to Robert Mitchnick, BlackRock’s head of digital assets, speaking at the Bitcoin 2024 conference on July 25 in Nashville, Tennessee. 

“I would say that our client base today, their interest overwhelmingly is in Bitcoin first, and then somewhat in ETH… and there’s very little interest today beyond those two,” Mitchnick said at a panel entitled From Strategy to Innovation: BlackRock’s Bitcoin Journey.

“I don’t think we’re gonna see a long list of crypto ETFs,” Mitchnick said. BlackRock launched its first crypto exchange-traded funds — iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust ETF (ETHA) — in January and July, respectively.

Not all asset managers agree. Franklin Templeton, which also issues BTC and ETH ETFs, is optimistic about more cryptocurrency ETFs, including a Solana product.

“Besides Bitcoin and Ethereum, there are other exciting and major developments that we believe will drive the crypto space forward,” Franklin Templeton wrote in an X post on July 23.

Most of Blackrock’s clients see BTC and ETH as complements, rather than competitors, Mitchnick said. When clients buy ETH ETFs, they usually add to an existing crypto portfolio allocation, rather than swap out of BTC, Mitchnick added. He cautioned that data on investor flows into ETH ETFs —- which only started trading on July 23 — is limited.

Related: Ethereum ETF sell-off signals more trouble — 10x Research

“The whole store of value use case within crypto is pretty definitively territory that Bitcoin owns,” Mitchnick said.

“ETH is trying to do a bunch of different applications that for the most part, Bitcoin is not trying to do,” he added. “So, really, they’re more complements than they are competitors or substitutes.”

Mitchnick said he expects investors to allocate eventually around 20% of crypto holdings to ETH, with the remainder going to BTC.

BlackRock’s crypto ETFs are among the most popular in the industry, with IBIT commanding some $22 billion in assets under management (AUM) and ETHA approaching $270 million after only a few days of trading.