A marquee at the main entrance to BlackRock’s headquarters building in Manhattan.
Eric McGregor | Rocket Light | Getty Images
SALT LAKE CITY — A year ago, Samara Cohen thought there was a lot of pent-up demand Bitcoin She and her team at BlackRock launched the first-ever Bitcoin spot exchange-traded product in the United States.
Cohen, who as chief investment officer oversees the asset manager’s exchange-traded funds and index investments, told CNBC that BlackRock now believes the demand is for a better way to acquire Bitcoin. “This is for ETF packaging,” she told CNBC on stage at a license-free conference in Utah.
Currently, the total market value of all 11 spot Bitcoin ETFs has exceeded US$63 billion, and the total flow is close to US$20 billion. In the past five trading days alone, net inflows into spot Bitcoin ETFs have exceeded $2.1 billion, with BlackRock accounting for half of that.
Trading volumes surged as Bitcoin hit its highest level since July this week, surpassing $68,300. As these spot token funds and cryptocurrency market caps rise in tandem, Bitcoin is up about 140% in the third quarter from the same period last year, outpacing the S&P 500. crypto stocks Coin Library It ended the week up about 24%, its best week since February.
Cohen told CNBC that one of the strategies to attract clients into his fund is to educate cryptocurrency investors on the benefits of exchange-traded products (ETPs).
The 13F filings, which provide quarterly data on equity positions held by large investors, show that 80% of buyers of these new spot Bitcoin products in the United States are direct investors. Cohen told CNBC that of the 80% of direct investors, 75% had never owned iShare before, one of the most well-known and largest ETF providers in the world.
“So as we embarked on this journey, we expected that we would need to educate ETF investors about cryptocurrencies and Bitcoin,” Cohen said. “It turns out that we educated crypto investors a lot about ETP wrappers. The benefits of education.”
Before the U.S. Securities and Exchange Commission approved a spot Bitcoin fund in January, investors had several ways to buy and custody the cryptocurrency. Centralized exchanges like this Coin Library One of the most user-friendly options for US investors. But the blockbuster Bitcoin ETP has made it clear to Cohen and others on Wall Street that cryptocurrency exchanges don’t offer digital asset investors everything they need.
BlackRock’s IBIT vs. Bitcoin YTD
It helps that the United States is a huge digital asset market. new Data from chain analysis It shows that North America remains the largest cryptocurrency market in the world, accounting for nearly 23% of all cryptocurrency trading volume. The blockchain analytics platform estimates that $1.3 trillion in on-chain value was received between July 2023 and July 2024.
In its recently released “State of Cryptocurrency” report, venture capital firm a16z found that more than 40 million Americans hold cryptocurrency.
Adoption so far has primarily been through wealth management clients asking advisors to add new spot crypto products to their portfolios.
In August, Morgan Stanley became the first major bank to allow its 15,000 financial advisors to market BlackRock and Fidelity’s Bitcoin ETFs to clients with net worth of more than $1.5 million. Other companies are still conducting internal due diligence before allowing their armies of FAs to begin aggressively marketing funds.
“Wealth management institutional allocators haven’t allocated yet,” VanEck CEO Jan van Eck told CNBC in Utah. “I mean, they haven’t even warmed up.”
Van Eck compared this to the European market, where the company has 12 token-based products trading.
“This is exactly what we are seeing in Europe,” he said. “Few private banks actually approve investing in Bitcoin or Ethereum Van Eck said his company has about $2 billion in assets in European crypto ETPs, with a large portion coming from individual investors.
Wall Street needs rules from lawmakers on Capitol Hill to feel more comfortable with cryptocurrencies.
ETFs create transparency
Cohen believes that in many ways ETFs and blockchain technology are solving similar problems.
“ETFs have been a decentralizing force in the TradFi market, bringing more access and transparency, and importantly, in the post-crisis period of 2008 and 2009, ETFs really accelerated growth,” Cohen said of traditional finance said during the market.
“I find it very meaningful that the Bitcoin white paper was released on October 31, 2008, and then G20 leaders from around the world met to discuss the consequences of the financial crisis and how to increase transparency through public reporting,” Cohen continued.
BlackRock reduces risk through the use of counterparty clearing and multilateral trading. In the TradFi market, these initiatives have given ETFs a huge boost.
“At the same time, DeFi is becoming a reality over the next 15 years,” she said.
“Is this a win for Bitcoin? Is this a win for ETPs? To me, the answer is: It’s a win for investors because we can effectively bring together these ecosystems that are solving the same goals. “
About The Author
