ETF Q&A: BlackRock

Robert Mitchnick, Head of Digital Assets at BlackRock

Danielle Rutsky, ETF Lead Product Manager at Nasdaq

What are some of the key initiatives you are currently focused on at BlackRock within digital assets?

BlackRock is committed to delivering best-in-class products enabling choice and access for investors. With the launch of IBIT as part of the first ever spot bitcoin exchange-traded products (ETPs) in the U.S., we were focused on our ability to bring an institutional-grade product to a new asset and provide a breakthrough in access for investors. The follow-on launch of ETHA was commensurate with this approach. The value proposition to investors of being able to access bitcoin and ether in a liquid, low-cost, convenient vehicle has been clear, with IBIT breaking all past records in reaching $10B in AUM in seven weeks and $20B in AUM in less than five months.

BlackRock recently launched IBIT and ETHA on Nasdaq. What trends are you seeing for cryptocurrency ETPs?

From the outset, we have seen strong demand from self-directed investors and high net worth individuals investing in crypto on their own accord, these high conviction investors are the primary driver of the robust inflows observed to date. For institutional investors and wealth advisory platforms, the adoption cycle tends to be longer. In general, it can take major Wealth platforms multiple years to fully approve new ETFs. We have started to see a number of major Wealth platforms outside of the RIA channel approve IBIT for their advisors, which is happening on an expedited timeline from what you normally see. We remain focused on providing education and research to help investors assess this new asset and navigate potential portfolio construction implications.

What types of use cases are you seeing investors utilize these strategies for?

We have seen investors coalesce around two main investment narratives when considering bitcoin and Ethereum, which offer distinct value propositions.

Bitcoin is a scarce, decentralized, and non-sovereign global monetary alternative that could serve as a potential hedge against increasing global disorder and economic instability. Bitcoin offers a potential means of holding wealth that is detached from challenges associated with any specific nation or government, and some investors are starting to consider it as a potentially unique portfolio diversifier during periods of uncertainty.

Ethereum is a global decentralized computing platform that serves as the core infrastructure underpinning a diverse range of blockchain-based applications. Given Ethereum’s role as a key foundational layer for blockchain-based activities, some investors are viewing Ethereum as a proxy for the broader adoption and integration of blockchain technology.

What’s next for BlackRock over the next 12 months?

Our priority continues to be supporting our clients and helping them further their understanding of digital assets, particularly in relation to a broader portfolio strategy. We are focused on delivering tools and insights to help clients navigate portfolio construction and tailor their exposures in alignment with individual risk and return preferences.