In an interview with Bloomberg on July 29, Samara Cohen, chief investment officer of BlackRock ETFs, was asked about the progress of large brokerage firms such as Morgan Stanley, Wells Fargo and UBS in introducing and promoting cryptocurrency ETFs.
BlackRock CIO of ETF and Index Investments Samara Cohen discusses the iShares Ethereum Trust ETF (ETHA) and expects we'll see allocation of crypto ETFs in model portfolios by the end of this year and into 2025 https://t.co/5UOLwIRWHL pic.twitter.com/rYqpym7Wqg
— Bloomberg Crypto (@crypto) July 29, 2024
Cryptocurrency ETFs will be included in “standard portfolios”
Samara Cohen noted that these brokerages are currently conducting risk analysis, due diligence, and considering the role of Bitcoin (BTC) and Ethereum (ETH) in their investment portfolios. Samara Cohen predicts that cryptocurrency ETFs may be included in the “Model Portfolio” by the end of 2024. Samara Cohen said:
“As we move forward later this year and next year, we will see allocations to these standard portfolios, which will give us more guidance on how investors allocate to them (cryptocurrency ETFs).”
"Standard investment portfolios" provided by large securities services brokers usually adopt diversified investment strategies with the goal of balancing risk and return according to a clear strategy. These standard portfolios can be thought of as preset investment strategies, which are like ready-made templates for investing. BlackRock expects standard portfolio assets under management to grow from $4.2 trillion today to $10 trillion by 2028.
What to think about Ethereum ETFs
On the other hand, when asked about the recently listed Ethereum ETF, Samara Cohen said that Bitcoin and Ethereum are two very different asset classes with different uses, but they are very useful as "portfolio diversification tools." it works.
However, the Ethereum ETF has faced significant net outflows since its launch. According to data from Sosovalue, the total net outflow of the Ethereum ETF since its listing has exceeded US$400 million. These net outflows mainly came from ETHE, with an outflow of approximately US$1.7 billion.
Samara Cohen said she is not worried because the launch of these ETFs itself is successful and they provide an entry point for investors who want to add Ethereum to their portfolios to do so.
She pointed out that some higher-fee ETFs have seen significant outflows recently (possibly referring to Grayscale's ETHE), as well as some alternative investment vehicles used for Ethereum exposure, but he is not worried, citing :
“Investors really want to increase their exposure to Ethereum, especially when they have enough confidence in the entire ecosystem that they want to include Ethereum in their overall portfolio.”
We won’t see other crypto ETFs anytime soon
On the other hand, when talking about whether cryptocurrencies such as Solana are also likely to successfully launch ETFs, Samara Cohen asserted that it is unlikely that spot ETFs for other altcoins will appear in the foreseeable future, because judging from the current market, there are no Cryptocurrencies can meet the same ETF listing standards as Bitcoin and Ethereum.
It is worth mentioning that Robert Mitchnick, head of digital assets at BlackRock, had previously expressed the same view at the Bitcoin 2024 conference.
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