BlackRock’s CIO of index investments mentioned it “will be a while” before the world’s largest asset manager expands its digital asset ETF roster.
BlackRock, the world’s largest asset manager, won’t be joining the bandwagon of asset issuers filing for spot Solana exchange-traded fund (ETF) any time soon.
On July 29, Samara Cohen, the CIO of ETF and index investments at BlackRock, told Bloomberg that “it will be a while” before the investment firm expands its digital asset ETF roster beyond Bitcoin and Ethereum.
“We really look at the investability to see what meets the criteria, what meets the bar to be delivered in an ETF,” Cohen said. “For us, right now, both between investability considerations and also what we hear from our clients, Bitcoin and ETH definitely meet that bar — I think it will be a while before we see anything else.”
Cohen’s remarks come after VanEck’s June 27 filing for a spot Solana ETF impressed a number of rival asset issuers to submit their very own functions for SOL funds within the run-up to identify Ether ETFs debuting on July 23.
Nonetheless, many analysts doubt that the applications will receive approval from the U.S. Securities and Exchange Commission (SEC), noting that, unlike Ethereum and Bitcoin, there are no regulated futures markets for SOL in the U.S. — a criteria emphasized by the SEC when approving ETFs for Bitcoin and Ethereum.
Further, the SEC described SOL as a security rather than a commodity in its lawsuits against the U.S. centralized exchanges Coinbase and Kraken final yr.
Ether ETFs debut
The interview adopted an arguably lackluster debut week for spot Ether ETFs, with the sector shedding $341 million. The outflows were driven by profit-taking from traders who bought up shares in the Grayscale Ethereum Trust (ETHE) at a discount prior to its ETF conversion.
However, excluding ETHE, the funds would have hosted $1.17 billion worth of inflows, with Ethereum ETF except for ETHE posting positive flows so far — including more than $500 million to Blackrock’s Ishares Ethereum Trust (ETHA).
Cohen characterized ETHA’s debut week as a “strong launch,” but acknowledged it is still “early days” and that many investors are “finding the optimum access points” to add Ethereum exposure to their portfolios.
Looking ahead, Cohen expects to see major large broker-dealers and securities firms like Morgan Stanley, Wells Fargo, and UBS adding Ether ETF shares to their model portfolios in late 2024 and early 2025. She added that major tradfi institutions are likely still engaged in risk analytics and due diligence to assessments regarding ETH at this time.
“I think what will happen at the end of this year and into next year is we will see allocations made in model portfolios, which will give us much more of a steer as to how investors are using them,” Cohen said.
Cohen also noted that although BlackRock hasn’t added crypto ETFs to its model portfolios, the company’s overall holdings include “very small allocations either to crypto, crypto futures, or crypto ETFs.”
ETH’s value is down 0.4% over the previous 24 hours, whereas SOL tumbled 5.9% over the identical interval, in keeping with The Defiant’s crypto value feeds.
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