BlackRock: Our Spot Ether ETFs Are Complements to Bitcoin ETFs, Not Substitutes

The investment giant’s head of digital assets discussed the company’s approach to crypto during a talk at the annual Bitcoin Conference, which kicked off Thursday in Nashville.  

Nashville, Tenn.—BlackRock, the world’s largest asset manager, said its bitcoin and ether exchange traded funds (ETFs) are “more complements than they are competitors or substitutes,” reaffirming its commitment to both cryptocurrencies.

The comments were made on Thursday in a talk with Robert Mitchnick, BlackRock’s head of digital assets, at the 2024 Bitcoin Conference being held in Nashville, Tennessee. Asking Mitchnick questions was Bloomberg Research Analyst James Seyffart. 

BlackRock’s iShares Bitcoin Trust (IBIT) made history as one of the 11 spot bitcoin ETFs that were finally approved by the SEC and launched in January. The firm was also part of the cohort of investment managers that launched spot ether ETFs on Tuesday with its iShares Ethereum Trust ETF (ETHA).

Read more: Ethereum ETFs Record $1 Billion in First Day Volume and $107 Million Inflows

Some believe an ether ETF will cannibalize investment capital that would have otherwise been allocated to the bitcoin ETFs but Mitchnick disagreed.

He pointed out that IBIT saw close-to-record-high inflows as recently as Monday, just a day before BlackRock launched its spot ether ETF. The spot bitcoin offering recorded just under $530 million in inflows.

“We saw the last couple of days, even with ETH [ETFs] launching, even with bitcoin price action down…we saw net creations into IBIT not any outflows,” Mitchnick said, adding that “ultimately, it’s actually healthy for the ecosystem.” 

Read more: BlackRock’s BUIDL Crosses $500 Million in Tokenized Treasuries

Mitchnick revealed that BlackRock’s entry into crypto was part of a well-designed strategy that first took shape in 2021. That was when the investment giant partnered with Coinbase to integrate its portfolio management system called Aladdin with Coinbase’s full-service institutional crypto prime brokerage platform — Coinbase Prime. 

“Those were important early foundational steps that ultimately put us in a position to do the bitcoin ETF,” Mitchnick said.

The integration of Coinbase with Aladdin not only means BlackRock can now trade bitcoin and other cryptocurrencies, but also that BlackRock’s clients will have access to that same functionality.

“In the future, any BlackRock portfolio manager or fund or any Aladdin client fund, will be able to trade, settle, [and] custody bitcoin within their existing operational and risk contract, which is super important for institutions,” Mitchnick said.

There are now more than 200 institutions using BlackRock’s Aladdin platform, according to the company’s website.

“Clients include insurers, pensions, corporations, asset managers, banks, and official institutions,” according to the site.

BlackRock’s crypto strategy isn’t just limited to ETFs. The firm launched its tokenized fund BUIDL in early 2024 and its market capitalization has now swelled to more than $500 million.

“When we think about the digital asset space, we’re thinking about it across crypto, stablecoins and tokenization,” Mitchnick said. “We launched a tokenized fund earlier in the year, now [it’s] the largest tokenized fund in the world.”