- BlackRock’s Ethereum ETF has reached $1 billion in assets under management but trails far behind its Bitcoin counterpart
- The firm’s head of digital assets has acknowledged that Ethereum’s investment appeal is more complex, leading to slower adoption
- BlackRock remains committed to educating investors about Ethereum’s potential and its place in the evolving crypto landscape
BlackRock’s Ethereum ETF has reached $1 billion in AUM since its debut in July, but its head of digital assets had called the performance “underwhelming.” When contrasted with the performance of the firm’s Bitcoin ETF, IBIT, which hit $2 billion in just 15 days, the adjective is fair. Robert Mitchnick pointed out Messari Mainnet conference in New York that Ethereum is harder to sell than Bitcoin as a narrative, hence its more tentative uptake.
Mitchnick: Ethereum ETF Has Had “A Good Start”
BlackRock and other entities launched their Ethereum ETFs in July, but according to Mitchnick its underperformance compared to Bitcoin ETFs was not unexpected, telling the conference, “You don’t expect them to ever be quite as large in terms of flows and AUM as their Bitcoin counterparts are.”
Mitchnick put the difference down to Ethereum’s more complex narrative, which presents a challenge for mainstream investors as opposed to Bitcoin’s ‘digital gold’ narrative. “With ETH, I think the investment story and narrative is a bit less easy for a lot of investors to digest,” Mitchnick explained, adding that part of BlackRock’s focus now is on educating investors to help them understand Ethereum’s long-term potential. Mitchnick called the process by which this will take place an “education journey.”
Different Types of Investor
It isn’t just the fact that Ethereum is a different beast from Bitcoin that has made it struggle for adoption. Mitchnick highlighted the different investor profiles for the two assets, suggesting that while Bitcoin remains the dominant choice, Ethereum will eventually secure a solid 20% share of most crypto portfolios.
The Ethereum ETF has also faced regulatory scrutiny, particularly over its proof-of-stake mechanism, which has further complicated its uptake. BlackRock, along with other asset managers like Bitwise and Fidelity, continues to promote Ethereum ETFs, aiming to bridge the gap in understanding between Bitcoin and Ethereum among investors.
