BlackRock's Head of Digital Assets

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The SEC’s green light to Ethereum spot ETFs has sparked optimism about the future of other cryptocurrency ETFs, with some anticipating Solana funds to be next in line. However, BlackRock’s head of digital assets Robert Mitchnick believes this is unlikely, as his clients show “very little” demand for other cryptocurrencies beyond Bitcoin and Ethereum.

“I would say that today our customer base is mostly interested in Bitcoin first, and then to some extent ETH… and there is very little interest beyond those two today,” Mitchnick said, speaking at the Bitcoin 2024 convention in Nashville yesterday.

“I don't think we're going to see a long list of cryptocurrency ETFs,” Mitchnick said.

BlackRock's iShares Bitcoin Trust (IBIT) was launched in January. The fund's holdings have surpassed $22 billion in bitcoin, making it the largest bitcoin ETF in the world, according to updated data. data.

Following the debut of IBIT, BlackRock entered the Ethereum ETF market earlier this week. Its iShares Ethereum Trust (ETHA) just finished its third day of trading with nearly $71 million in daily inflows, as reported by Crypto Briefing.

BlackRock may see limited client interest in other cryptocurrency ETFs, but some of its competitors may not.

On June 27, the asset manager VanEck filed application for first Solana trust in the United States. Matthew Sigel, director of digital asset research at VanEck, said the firm believes SOL is a commodity.

Just one day after VanEck's request, 21Shares followed up with a presentation to launch “21Shares Core Solana ETF”, an ETF that seeks to give direct exposure to Solana. The firm said the filing was a necessary step.

Another major fund manager, Franklin Templeton, also promoted Solana in a post X which came on the day of the debut of its Ethereum spot ETF.

Not all fund managers disagree with BlackRock. Cathie Wood, chief executive of ARK Invest saying In an interview with the WSJ published in February, it was said that the SEC is unlikely to accept spot products for any other cryptocurrency besides Bitcoin and Ethereum.

However, Wood's ARK Invest, opted not to continue with its Ethereum ETF following approval of the listing on May 23.

Bitcoin and Ethereum as complementary assets

Blackrock views Bitcoin and Ethereum as complementary assets with distinct roles, rather than “competitors” or “substitutes,” Mitchnick said.

“Bitcoin is trying to be a global monetary alternative, like a potential global payment system,” while “ETH is trying to do a bunch of different applications that, for the most part, Bitcoin is not trying to do,” the executive explained.

Mitchnick predicts that investors will allocate roughly 20% of their cryptocurrency holdings to Ethereum and the remaining 80% to Bitcoin.

Previously, Rick Rieder, BlackRock's global head of fixed-income investments, told the WSJ BlackRock could add more Bitcoin to its portfolio If investors feel more comfortable with it.

BlackRock's IBIT is one of the most successful ETFs. The fund has outperformed the Nasdaq ETF in terms of inflows this year, ranking fourth out of more than 3,000 US ETFs, as reported by Crypto Briefing.

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