BlackRock Prioritizes Bitcoin, Ethereum, Delays Altcoin ETF Plans
2024-12-13
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BlackRock, the world’s largest asset manager, has shifted its focus to Bitcoin and Ethereum, opting to bypass the launch of any new altcoin-based Exchange-Traded Funds (ETFs).
The firm’s Bitcoin BTCUSD and Ethereum ETHUSD ETFs, IBIT and ETHA, respectively, have shown significant performance milestones this year.
Stellar Performance Fuels Strategic Focus for BlackRock’s IBIT and ETHA
Bloomberg ETF analyst Eric Balchunas reported the stance, citing Jay Jacobs, the head of BlackRock’s ETF department. He said that BlackRock does not plan to launch any new altcoin-focused ETFs. Jacobs also emphasized the company’s intention to concentrate on expanding the reach of its existing Bitcoin and Ethereum ETFs, which have performed exceptionally well so far.
“We’re just at the tip of the iceberg with Bitcoin and especially Ethereum. Just a tiny fraction of our clients own IBIT and ETHA, so that’s what we’re focused on (vs. launching new altcoin ETFs),” Jay Jacobs reportedly stated.
The statement highlights BlackRock’s strategy to deepen its foothold in the cryptocurrency market through its flagship ETFs, as opposed to diversifying into smaller altcoins like Solana SOLUSD or Ripple’s XRP.
Indeed, BlackRock’s Bitcoin ETF has been a standout performer, recently surpassing over 50 European funds combined in trading volume. Meanwhile, its Ethereum ETF joined the prestigious $1 billion ETF club within just two months of launch. Taken together, these milestones display the increasing institutional appetite for these digital assets.
Against this backdrop, BlackRock’s success has been widely recognized. Its Bitcoin ETF was recently named the top performer of the decade alongside Fidelity’s FBTC.
These achievements align with BlackRock’s cautious approach to the broader crypto space. Earlier this year, the firm confirmed that it was not pursuing a Solana ETF despite market buzz. In late July, BlackRock’s digital asset head Robert Mitchnick cast further doubt on the immediate viability of Solana ETFs.
“I don’t think we’re going to see a long list of crypto ETFs. If you think of Bitcoin, today it represents about 55% of the market cap. Ethereum is at 18%. The next plausible investible asset is at, like, 3%. It’s just not close to being at that threshold or track record of maturity, liquidity, etc.,” Mitchnick said.
Meanwhile, BlackRock’s skepticism on XRP ETF likely stems from the ongoing regulatory uncertainty surrounding the token. By focusing on Bitcoin and Ethereum, the asset manager appears to be doubling down on assets with proven resilience and market appeal.
Market Expectations for Altcoin ETFs
BlackRock’s cautious stance on altcoins aligns with its overall conservative investment philosophy, which is displayed in its hesitance to endorse a Bitcoin reserve. Nevertheless, the firm has been vocal about Bitcoin’s role in institutional pockets, advocating for the allocation of up to 2% of portfolios to BTC. This mirrors its confidence in the asset’s long-term potential.
Although BlackRock remains uninterested in launching altcoin ETFs, analysts expect the US regulatory playing to change under Donald Trump. Some predict that ETFs for assets like Solana and XRP could receive approval by the end of 2025.
“The greatest Solana win coming from the new Trump Presidency will be our long-awaited ETF in 2025 or 2026. No surprise, the incredible VanEck team will lead the charge here with support from 21Shares and Canary Capital,” said Dan Jablonski, head of growth at news and research firm Syndica.
BlackRock’s potential shift toward entering altcoin-based markets likely depends on achieving regulatory clarity, which could drive significant demand. Meanwhile, Mike Venuto, co-founder of Tidal Financial Group, provided perspective on the broader ETF market, as noted by Balchunas.
“We have people coming to us all the time trying to pitch ‘Bitcoin + something else’ ETFs. Every options strategy you can think of is going to be tied to Bitcoin, Nvidia, Tesla, and MicroStrategy in ETFs. It’s coming,” Balchunas reported, citing Venuto.
BlackRock’s record-breaking success with its Bitcoin and Ethereum ETFs underscores its strategic focus and alignment with market demand. While other firms explore altcoin ETFs, BlackRock’s dedication to expanding its existing offerings positions it as a leader in shaping the future of institutional crypto investments.