BlackRock, the world’s largest asset manager, has reaffirmed its belief that only Bitcoin and Ethereum are worth investing in cryptocurrencies. According to Arkham Intel, as of January 2, 2024, BlackRock’s crypto portfolio, valued at $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 worth $52.93 billion, with Bitcoin currently trading at $96,125. Ethereum follows with 1.037 million ETH worth $3.58 billion at $3,454 per token. Recently, Bitcoin saw a modest 2.79% rise, adding $1.53 billion to its value, while Ethereum posted a 2.59% gain, increasing by $89.61 million.
It is worth noting that BlackRock’s CEO Larry Fink has characterized Ethereum as an asset rather than a currency, reflecting the firm’s strategic focus. BlackRock now ranks as the 12th largest Ethereum holder globally, with 993,591 ETH, representing 0.12% of the asset’s total supply.
BlackRock’s foray into the cryptocurrency world has not been straightforward. Initially skeptical, the firm launched its Bitcoin ETF after gaining SEC approval, following Grayscale’s legal victory against the SEC. The ETF’s impressive performance helped push Bitcoin’s price past $100,000 earlier this year, with assets under management exceeding $50 billion in just 11 months.
The rapid growth of the ETF has sparked speculation that BlackRock’s crypto investments could one day surpass gold ETFs. Nate Geraci, CEO of ETF Store, projected that the firm’s Bitcoin ETF could overtake SPDR Gold Shares, the leading gold ETF, by 2025, provided Bitcoin maintains its upward momentum.
BlackRock’s focus on Bitcoin and Ethereum aligns with investor sentiment, with the firm’s Robert Mitchnick previously stating that there is very little interest in other cryptocurrencies among their clients. This viewpoint highlights the challenges faced by alternative tokens in gaining institutional traction.
Despite the 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 a small fraction of the total.
Meanwhile, 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 altcoin adoption.
BlackRock’s Ethereum-focused ETF marked another milestone for the asset manager. Approved by the SEC earlier this year, the fund elevated Ethereum’s profile as a blockchain platform for decentralized applications and smart contracts, alongside its status as an asset of institutional interest.