- While Bitcoin ETFs see net-positive inflows, Ethereum funds face significant outflows, notably Grayscale’s ETHE.
- Samara Cohen anticipates that detailed risk analysis will enhance the integration of Bitcoin and Ethereum into diversified portfolios.
- BlackRock dismisses the possibility of a Solana ETF, focusing on the solid performance and client interest in Bitcoin and Ethereum ETFs.
If you are feeling a little disappointed with Spot Ethereum exchange-traded fund (ETF) flows and the impact they had on ETH price – Fear not, BlackRock has you covered. Speaking to Bloomberg’s Senior ETF analyst Eric Balchunas, BlackRock’s investment chief for ETFs, Samara Cohen said the firm is confident in the growth of their crypto funds.
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ETF Selling Continues, Albeit at Slower Rate
However, while the Spot Bitcoin ETFs have seen a 4-day streak of net-positive inflows, ETH funds are continuing to bleed.
The past 6 trading days since trading started on 23 July, have seen outflows of Grayscale’s ETHE fund to the tune of US$1.843 billion (AU$2.815bn) and total outflows of US$524.4 million (AU$802.34m).
This is in large part due to positive flows mainly by BlackRock’s ETHA, Bitwise’s ETHW and Fidelity’s FETH funds which brought in a combined US$1.04 billion (AU$1.59bn).
However, according to Farside the ETHE outflows seem to be slowing down, possibly following the pattern of Grayscale’s Bitcoin fund outflows in the initial days.
Major Players Yet to Enter Crypto ETF Game
Cohen said despite these numbers the Ether fund launch was a strong start with solid trading volumes. Cohen added that Ether accounted for 40% of new assets gathered but only 25% of trading volumes, due to significant outflows from higher-priced Ethereum ETFs and likely other proxy vehicles.
She said the trend suggests that investors are keen on maintaining their ETH exposure, particularly when integrating it into well-trusted portfolio ecosystems.
But according to Cohen the focus for this year and the next will be on risk analytics and due diligence by investment professionals who assess Bitcoin and Ethereum as distinct asset classes with unique roles in portfolios, especially as diversifiers.
As the year progresses, the firm expects to see these cryptocurrencies being incorporated into model portfolios, providing clearer insights into their usage by investors.
I think what will then happen towards the end of this year and into next year as we will see allocations made in model portfolios which will give us much more of a steer as to how investors are using them.
Samara Cohen, BlackRock BlackRock Shoots Down Solana Fund Talks
But ETH and BTC in ETFs is as far as BlackRock goes for now, as there won’t be a Solana BlackRock ETF anytime soon. Balchunas asked Cohen if they were contemplating other crypto ETFs, but Cohen made sure to stop any speculations in its tracks.
For us right now, both between any investability considerations and also what we hear from our clients, you know, Bitcoin and ETH definitely meet that bar. I think it will be a while before we see anything else.
Samara Cohen, BlackRock Cohen’s statement echoes that of BlackRock’s head of digital assets, Robert Mitchnick, who spoke on the topic during Bitcoin 2024 in Nashville, Tennessee earlier in July.
Related: Solana Outpaces Ethereum in Weekly Fee Revenue and MEV for the First Time
Mitchnick believes most clients have little interest in anything beyond BTC and ETH and would likely hold these assets 80/20 as part of their only allocations into crypto.
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