💥💥💥 #CryptoETFs to hit ‘model portfolios’ toward year end: #BlackRock
BlackRock's Crypto ETF Integration and Market Impact
BlackRock's chief investment officer for ETFs, Samara Cohen, announced in a Bloomberg interview on July 29 that digital currency-backed exchange-traded funds (ETFs) are expected to be included in “model portfolios” by the end of 2024. Major wirehouses like Morgan Stanley, Wells Fargo, and UBS are currently conducting risk analytics and due diligence to integrate Bitcoin ($BTC ) and Ether ($ETH ) into their portfolios.
Model Portfolios and Market Growth
Model portfolios from large brokerage firms use diversified strategies to balance risk and return. BlackRock projects their growth from $4.2 trillion to $10 trillion in five years. Salim Ramji, BlackRock’s global head of iShares, described this potential impact as “massive,” aligning with fiduciary advisers' increasing adoption.
Bitcoin and Ether as Portfolio Diversifiers
Cohen emphasized Bitcoin and Ether as distinct asset classes with unique use cases, serving as “portfolio diversifiers.” Despite recent net outflows from spot Ether ETFs, Cohen is optimistic due to their strong initial performance and role as an “access point” for investors. She noted significant outflows from higher-priced funds like the Grayscale Ethereum Trust, which saw $1.7 billion in outflows since its conversion to a spot ETF, with $210 million on July 29 alone. About 10% of these outflows were redirected into its zero-fee Ethereum Mini Trust.
Ether Spot ETFs and Future of Crypto ETFs
Preliminary data shows Ether spot ETFs have had more outflows than inflows since launching on July 23. Cohen and Robert Mitchnick of BlackRock indicated that a #spotETF for altcoins like Solana and other crypto ETFs are unlikely in the near term.
BlackRock is integrating crypto ETFs into model portfolios, expecting significant market growth. Bitcoin and Ether are viewed as valuable diversifiers despite recent outflows from Ether ETFs. The introduction of altcoin ETFs remains uncertain.
