BlackRock Believes Launching an Ethereum ETF Won’t Lead to Funds for Other Cryptocurrencies

Speaking at the Bitcoin 2024 conference, BlackRock's head of digital assets, Robert Mitchnick, stated that while the launch of an Ethereum cryptocurrency ETF is important, it will not result in the creation of new funds for other cryptocurrencies.

"I don't think we will see a long list of crypto ETFs anytime soon," Mitchnick said.

Despite BlackRock's active expansion in the cryptocurrency market, the company does not plan to create ETFs for alternative cryptocurrencies in the near future. He cited VanEck as an example, noting that it was the first company to apply for an ETF based on the Solana cryptocurrency, though experts consider its approval unlikely.

Mitchnick explained that launching such an instrument requires a high level of liquidity and market maturity. The expert emphasized that the current market capitalization of Bitcoin is about 55% of the total crypto market capitalization, Ethereum’s is 18%, and the next largest asset is only 3%. According to him, this is far from the necessary conditions for creating an ETF.

Mitchnick acknowledged that cryptocurrencies as an asset class are "here to stay," and Bitcoin and Ethereum complement each other: Bitcoin as a monetary alternative, and Ethereum as a platform for applications.

The expert noted that the risks of investing in Bitcoin are mostly related to regulation and the early stage of cryptocurrency market development, rather than traditional financial threats such as inflation or financial crises. This, unlike traditional assets, offers completely different investment opportunities — a typical investor in BlackRock's IBIT fund allocates 2–3% of their funds to Bitcoin investments.

On July 23, trading began on U.S. stock exchanges for shares of nine exchange-traded funds (ETFs) based on the cryptocurrency Ethereum (ETH). These so-called Ethereum ETFs are less popular than similar exchange-traded funds based on Bitcoin.

By the third day after trading started, investors had allocated about 20% of the assets in Bitcoin-based ETFs to Ethereum ETFs. The net inflow of funds on the first day of trading in Ethereum ETFs was $106.7 million. However, on the second day of trading, investors withdrew about $130 million.

As of the trading day on July 25, the capital outflow from Ethereum funds exceeded $150 million. The value of assets under management in the nine American Ethereum ETFs fell to $8.9 billion.