In a revealing interview with Bloomberg on Monday, July 29, Samara Cohen, BlackRock’s Chief Investment Officer for ETFs, announced that the investment giant has no plans to pursue any additional crypto ETFs in the foreseeable future. This includes the much-discussed Solana ETF. Cohen explained that while Bitcoin and Ethereum have met BlackRock’s stringent expectations, no other altcoin, including Solana, currently meets the criteria necessary to warrant a new ETF offering.
BlackRock’s Stance on the Solana ETF
Bitcoin and Ethereum dominate the crypto market, with Bitcoin holding a commanding 55% share and Ethereum accounting for 17%. In contrast, the rest of the altcoins, including Solana, contribute less than 10% each. This discrepancy poses significant challenges in terms of liquidity and the potential for market manipulation, making the introduction of new crypto ETFs like the Solana ETF less feasible at this time.
According to sources present, Cohen emphasized the technical and market-based difficulties in launching additional crypto ETFs. “We really look at the investability to see what meets the criteria, what meets the bar to be delivered in an ETF. For us, both in terms of investability and also what we hear from our clients, Bitcoin and Ethereum definitely meet that bar, but it will be a while before we see anything else,” she stated during her Bloomberg interview.
According to reports, her remarks align with those of Robert Mitchnick, BlackRock’s head of digital assets, who reiterated at a recent Bitcoin conference that there is currently no scope for future crypto ETFs in the market. This solidifies BlackRock’s conservative approach towards expanding their crypto ETF offerings beyond Bitcoin and Ethereum.
Contrasting Views on the Solana ETF
Despite BlackRock’s cautious stance, other asset managers are more optimistic about the potential of a Solana ETF. VanEck, for instance, has been advocating for the Solana ETF, citing robust demand from the crypto community. According to reports, this optimism was partially validated when Solana recently surged past BNB, securing the fourth spot in market capitalization. However, Solana’s price faced a setback amid a broader market sell-off, trading 5% lower at $180 as of the latest updates.
The differing perspectives highlight the growing debate within the investment community regarding the viability and timing of launching a Solana ETF. While some see untapped potential, others, like BlackRock, remain skeptical due to the current market dynamics and regulatory landscape.
Crypto ETFs and Future Portfolios
Despite the hesitance towards new crypto ETFs, Cohen shared a promising outlook for existing crypto ETFs like Bitcoin and Ethereum. She projected that these ETFs would soon be integral components of “model portfolios” by the end of 2024. Her statement came in response to inquiries about where major financial institutions such as Wells Fargo, Morgan Stanley, and UBS stand regarding the adoption and promotion of crypto ETFs.
“These wirehouses are conducting extensive due diligence, risk analysis, and other evaluations to determine the appropriate role of Bitcoin and Ethereum in their portfolios,” Cohen elaborated. This indicates a growing institutional interest in incorporating crypto assets into mainstream investment strategies, albeit cautiously.
Cohen also highlighted the success of BlackRock’s Ethereum ETF, the iShares Ethereum Trust ETF (ETHA), which has recently been introduced to the market. She noted that ETHA has been driving significant inflows, underscoring the strong investor interest in Ethereum as an investable asset.
While BlackRock’s cautious approach signifies a significant setback for the immediate prospects of a Solana ETF, the ongoing interest from other asset managers suggests that the narrative is far from over. The Solana ETF remains a topic of keen interest and debate within the investment community. As the market evolves and the regulatory environment becomes clearer, the potential for a Solana ETF may be revisited.
In the meantime, BlackRock’s focus remains on solidifying the place of Bitcoin and Ethereum ETFs in the investment portfolios of major financial institutions. Whether the Solana ETF will eventually join these ranks is a question that only time will answer. For now, the crypto market continues to watch closely, anticipating the next moves in the ever-dynamic world of crypto investments.
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