Exchange-traded funds backed by digital currencies are expected to be included in “model portfolios” by the end of 2024, as stated by BlackRock’s chief investment officer for exchange-traded funds.
Samara Cohen, the investment chief for ETF and Index Investments at BlackRock, was questioned on July 29 regarding the progress made by major wirehouses like Morgan Stanley, Wells Fargo, and UBS in onboarding and pushing cryptocurrency ETFs.
Cohen pointed out that the wirehouses are currently examining the whereabouts of Bitcoin and Ether in their portfolios, performing risk analytics, and doing due diligence. As the year draws to a close, allocations into model portfolios will be observed, providing us with a better understanding of how investors are utilizing them.
The model portfolios provided by big, full-service brokerage firms often target a balance between risk and return through a transparent strategy and a diversified approach to investing.
They can be thought of as pre-made investment strategies, which function as ready-made templates or investment “recipes.”
Within the next five years, BlackRock projects that model portfolio management will increase from its current $4.2 trillion to $10 trillion.
Salim Ramji, global head of iShares and index investments at the asset manager, predicted that this month would be “massive,” going on to say that it is the way that an increasing number of fiduciary advisers are conducting business, and that is how we are conducting business with them.
According to Cohen, although Ether and Bitcoin are two completely different asset classes with distinct applications, they can be helpful as “portfolio diversifiers.”
Regarding the net outflows of spot Ether ETFs since its launch, Cohen stated that she was not worried because the product had a successful launch and they offer a “access point” for investors wishing to include ETH in their portfolios.
Speaking about the net outflows from spot Ether ETFs since its inception, Cohen stated that she wasn’t worried because it was a successful launch and they give investors who want to include ETH in their portfolios a “access point.”
In addition to “proxy vehicles,” she mentioned that there had been significant withdrawals from higher priced funds, most likely alluding to Grayscale’s ETHE.
Investors are eager to obtain exposure to ETH, particularly if they plan to utilize it as part of a diversified portfolio in an environment they trust.
With the most recent $210 million withdrawal on July 29, the Grayscale Ethereum Trust (ETHE) has lost $1.7 billion in total since its spot ETF conversion. But about ten percent of it has been invested in its Ethereum Mini Trust (ETH), which has no fees.
According to early statistics from Farside Investors, since the introduction on July 23, ether spot ETFs have now experienced four days in a row of outflows and just one day of inflows.
A spot ETF for altcoins like Solana is not expected to exist in the near future, according to Cohen’s confirmation. “I don’t think we’re gonna see a long list of crypto ETFs,” said Robert Mitchnick, BlackRock’s head of digital assets, at the Bitcoin 2024 Conference.
