According to CoinDesk, BlackRock CEO Larry Fink has started promoting a second spot ETF product based on Ethereum, following the debut of the company's bitcoin exchange-traded fund (ETF). Fink cited the transformational utility of Ethereum's blockchain as a reason for the new product. However, selling an ether (ETH) ETF could present a challenge to issuers, as investors may have already bought a bitcoin ETF and may not see the need for another crypto diversification tool.
Sui Chung, the CEO of CF Benchmarks, an index provider for digital assets and partner firm on the BlackRock iShares bitcoin ETF (IBIT), has been considering this issue. Chung believes that the primary focus should be on how bitcoin behaves and its price history, as a small allocation can diversify a portfolio and boost the overall risk-adjusted return. He also noted that marketing an ETH ETF to traditional finance investors could be difficult, as they may have already invested in bitcoin for diversification purposes.
BlackRock's Fink has already begun exploring the complex world of Ethereum by mentioning tokenization, a popular concept among traditional finance firms. However, Chung believes that an educational approach should also include explanations of smart contracts, decentralized finance (DeFi), and the differences between Bitcoin and Ethereum, such as Ethereum's move away from the energy-intensive proof-of-work security system to a greener validator model. BlackRock declined to comment on the matter.
