Earlier today, during a conversation with CNBC’s Andrew Ross Sorkin, Larry Fink, CEO of BlackRock, stated that he believes there is value in having an Ethereum ETF, seeing it as a progression towards broader tokenization in the financial industry.
Support for a Spot Ethereum ETF
If you feel positive about this new development, you will be happy to know that BlackRock’s iShares Bitcoin Trust (IBIT) was among the first Bitcoin ETFs debuted in the U.S., contributing approximately $1 billion to the $4.6 billion trading volume generated by these ETFs on their first day.
BlackRock’s Spot Bitcoin ETF Debut
BlackRock is now considering an Ethereum-based ETF, furthering its journey into the realm of tokenization. Fink sees tokenization as a means to address issues like money laundering and corruption.
Cryptocurrency as an Asset Class
Fink clarified his view of cryptocurrencies, not as currencies but as asset classes. He compared Bitcoin to gold, noting its role as a protective asset against geopolitical risks.
Exploring a Spot Ethereum ETF
On January 11, Samar Cohen, the Chief Investment Officer of ETFs and Index Investments at BlackRock, joined CNBC’s “Squawk on the Street” alongside Bob Pisani to talk about the new US-listed spot Bitcoin ETFs.
Trading Dynamics and Investor Interest
According to Cohen, the key concern for investors is how accurately these ETFs mirror Bitcoin’s performance. She stressed the significance of market quality, liquidity, spreads, and precise tracking to provide investors with direct exposure to spot Bitcoin, and was optimistic about BlackRock’s ETF fulfilling these criteria.
ETF Tracking and Performance
Cohen observed narrow spreads in the market, a sign of robust liquidity, which is beneficial for the ETF’s health and reflects strong investor engagement.
Market Conditions and Liquidity
Cohen sees the introduction of Bitcoin ETFs as a significant educational journey for all investor types, including institutions. She underscored the investor demand for Bitcoin access via ETFs as a key factor in the SEC’s decision to approve them.
Institutional Involvement and Learning Curve
BlackRock is concentrating on informing partners about the features and convenience of the ETF wrapper. Cohen highlighted the necessity for investors to understand the volatility and risk profile of the underlying asset, as with any ETF.
Educational Efforts and Risk Awareness
According to Cohen, pricing is a vital aspect. BlackRock’s ETF has a fee structure of 12 basis points initially, increasing to 25 basis points after the first $5 billion in assets or 12 months. She believes that zero fees for a limited period may be a competitive advantage.
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