BlackRock says that brokers are preparing to include crypto ETF shares in typical portfolios

What’s new? A senior executive at BlackRock, a major investment firm, believes that by the end of this year, shares of cryptocurrency-based spot exchange-traded funds (ETFs) will be included in the model portfolios of major asset managers such as Morgan Stanley, Wells Fargo, and UBS.

Source: X.com

What else is known? Model portfolios offered by large full-service brokerage firms often utilize a diversified approach to balance risk and return. Such portfolios can be viewed as pre-designed investment strategies, ready-made templates.

For example, Samara Cohen, the chief of BlackRock’s ETF and index fund investment department, said that brokers are already conducting due diligence and analyzing the role of bitcoin and Ethereum in their portfolios.

She believes that by the end of this year, companies will allocate some share to cryptocurrencies in their typical portfolios for clients, which will provide more insight into how investors are utilizing digital assets.

Cohen added that BTC and ETH are two very different asset classes with different use cases, while both are useful for portfolio diversification.

BlackRock is the issuer of two spot crypto ETFs. On January 11, the company launched a bitcoin fund under the ticker IBIT on Nasdaq. Since then, it has accumulated assets under management of $23,02 billion, and the inflow of funds reached $19,93 billion, which makes it the absolute leader of the segment by both indicators.

Also on July 23, the US securities regulator allowed spot ETH ETFs to enter the market. BlackRock’s ETHA fund, also launched on Nasdaq, accumulated $502,47 million under management, with inflows of $500,31 million, which was also the best result.

Cohen believes that spot funds based on other cryptocurrencies with large capitalization should not be expected in the near future. The same opinion is held by her colleague Robert Mitchnick, who heads the digital assets department at BlackRock. During a speech at the Bitcoin 2024 conference in Nashville, he said that the market will not see a long list of crypto funds.