The world’s largest asset manager has launched a Blockchain ETF, offering clients greater exposure to cryptocurrency and Blockchain-related companies.
BlackRock has officially launched a Blockchain-focused exchange-traded fund (ETF) that offers investors exposure to the cryptocurrency and Blockchain industry without the need to own digital assets directly.
On Wednesday, the world’s largest asset manager, which currently manages approximately $10 trillion in assets, added the Blockchain and Tech ETF (IBLC) to its iShares product line.
The $4.7 million ETF does not directly own cryptocurrencies or digital assets itself but instead tracks a number of international companies involved in the sector.
The ETF consists of 41 separate holdings, with the largest of these being US-based cryptocurrency exchange Coinbase, which accounts for 11.45% of the fund. Big Bitcoin (BTC) miners Marathon Digital Holdings follow it closely, with 11.19%, and Riot Blockchain Inc., accounting for 10.41% of total holdings.
As a sign of its readiness for future acquisitions, the ETF currently has a healthy cash position of 9.15% in USD.
Three Permanent Transformations Driving Growth
In conjunction with the launch of the new ETF, BlackRock released a report outlining three main areas of the market that are undergoing permanent change.
The report acknowledges that Millennials, now at their peak spending years, are and will be for several decades to come, “essential drivers of the global economy. Consequently, these groups’ unique needs and preferences, such as early adoption of decentralized finance and prioritization of sustainable products, may be set to surge.”
It is also worth noting that, “with Blockchain technology, consumers are acquiring independence not historically afforded by marketplace dynamics: crypto assets empower users by offering financial inclusion to the unbanked and allow users to regain control over the $150 billion annual market for their personal data.”
The document details how bullish BlackRock is on the cryptocurrency industry, stating that while most of the attention directed at digital assets focuses on price and volatility, the real value of Blockchain has yet to be realized fully: “We believe that the broader opportunity – leveraging Blockchain technology for payments, contracts, and general consumption – is still priceless,” the document reads.
The document also draws attention to the adoption of central bank digital currencies (CBDC), noting that 87 countries are currently in the process of exploring this technology, “which could drastically reduce marketplace frictions, democratize access to financial markets, and optimize monetary policies.”
Cryptocurrency ETFs are growing in popularity among institutional investors as a way to gain exposure to the cryptocurrency industry.
Debates over a spot Bitcoin ETF have reignited after a recent Nasdaq survey revealed that 72% of 500 financial advisors surveyed would be more willing to invest their client funds in a spot fund than one based on futures.
As Bloomberg analyst @EricBalchunas posted on Twitter earlier this month, “New Nasdaq survey of financial advisors (who control $26T in assets) finds 72% of them would be more likely to invest in crypto if a spot ETF were available. Also of advisors currently investing in crypto, 86% plan to increase investment and their ideal allocation is 6% of port.”
By Audy Castaneda
