BlackRock, the world’s largest asset manager, remains steadfast in its belief that only Bitcoin and Ethereum are worthwhile investments in the cryptocurrency market. According to Arkham Intel, as of January 2, 2024, BlackRock’s crypto portfolio, valued at a staggering $56.41 billion, is overwhelmingly dominated by these two assets, accounting for over 99% of its holdings.
Leading the way, BlackRock holds 550,643 BTC, with a value of $52.93 billion, as Bitcoin is currently trading at $96,125. Ethereum follows closely with 1.037 million ETH, collectively worth $3.58 billion at $3,454 per token. Bitcoin recently experienced a modest 2.79% increase, adding $1.53 billion to its value, while Ethereum posted a 2.59% gain, increasing by $89.61 million.
BlackRock’s CEO, Larry Fink, notably described Ethereum as “not a currency but rather an asset,” reflecting the firm’s strategic focus. With 993,591 ETH, BlackRock now ranks as the 12th largest Ethereum holder globally, representing 0.12% of the asset’s total supply.
BlackRock’s entry into the cryptocurrency world has been a journey filled with twists and turns. Initially skeptical, the firm launched its Bitcoin ETF after receiving approval from the SEC. This significant milestone was spurred by Grayscale’s legal victory against the SEC. The ETF’s exceptional performance pushed Bitcoin’s price above $100,000 earlier this year, with assets under management surpassing $50 billion in just 11 months.
The rapid growth of the ETF has led to speculation that BlackRock’s crypto investments could one day surpass gold ETFs. Nate Geraci, CEO of ETF Store, projected that BlackRock’s Bitcoin ETF could outperform SPDR Gold Shares, the leading gold ETF, by 2025, as long as Bitcoin maintains its upward momentum.
BlackRock’s focus on Bitcoin and Ethereum reflects the sentiment among investors. Robert Mitchnick of the firm previously stated that there is “very little interest” in other cryptocurrencies among their clients. This view highlights the challenges faced by alternative coins in gaining institutional traction.
Despite its heavy concentration in the top two cryptocurrencies, BlackRock’s portfolio includes exploratory holdings in stablecoins like USDC ($77.40 million) and lesser-known tokens such as COLLE, SPX, and MOG, although these make up only a fraction of the total.
In the meantime, competitors like Franklin Templeton and VanEck have ventured into blockchain projects, including Solana, which Franklin Templeton considers one of the most promising blockchain innovations. Similarly, WisdomTree and others have filed ETF applications for XRP.
While Solana and XRP gain traction, analysts like Eric Balchunas of Bloomberg believe that futures-based ETFs could pave the way for spot ETFs, creating a broader path for the adoption of alternative coins.
BlackRock’s Ethereum-focused ETF marked another milestone for the asset manager. Approved by the SEC earlier this year, the fund has elevated Ethereum’s profile as a blockchain platform for decentralized applications and smart contracts, in addition to its status as an asset of institutional interest.