Larry Fink of BlackRock Sees Potential in Ethereum ETFs and Broader Crypto Assets

2 Mins read

Wall Street asset manager BlackRock has expressed openness to exchange-traded funds (ETFs) tracking Ether, the native cryptocurrency of the Ethereum blockchain network. In recent comments, BlackRock CEO Larry Fink highlighted potential value in Ethereum ETF products following the successful approval and launch of bitcoin ETFs in the United States.

Fink’s remarks point to the growing acceptance of cryptocurrencies beyond just bitcoin among major financial institutions. As the world’s largest asset manager evaluates crypto as a prospective new asset class, support for additional cryptocurrency investment vehicles could help further mainstream digital assets.

Bitcoin as digital gold

Bitcoin digital gold

Speaking to CNBC, Fink compared Bitcoin’s role to gold as a store of value. He acknowledged Bitcoin’s appeal stems partly from its fixed supply schedule that will see the amount mined each year halve approximately every four years until the maximum of 21 million coins has been minted. This inherent scarcity program provides a measure of predictability around future inflation that gold also offers as a precious metal.

While Fink was cautious about cryptocurrencies serving as currencies, he sees merit in their use as investable assets. Just as investors hold gold bars or coins as a hedge, some allocate a portion of their portfolio to Bitcoin for similar diversification purposes. BlackRock was among the issuers that gained SEC approval to launch bitcoin ETFs last October, a landmark decision that immediately drew over $2 billion in trading on launch day.

Potential for Ethereum products

Fink pointed to the potential value in ETFs tracking Ether as another cryptocurrency-based investment avenue in the same discussion. Ether is the second largest digital asset by market cap and fuels the Ethereum network, the foremost blockchain platform for smart contracts and decentralized applications (dApps). He said BlackRock had filed to launch an Ether ETF shortly after bidding for a bitcoin ETF.

Unlike Bitcoin, which functions primarily as a store of value and medium of exchange, Ethereum has greater real-world use through the ETH tokens required to pay transaction fees on the network. Major companies utilize the Ethereum blockchain for non-fungible tokens (NFTs), supply chain management and other decentralized applications. While the SEC has authorized Bitcoin ETFs, it remains to be seen if similar approval will be extended to proposed Ether investment vehicles.

Regulatory outlook and mainstream adoption

SEC Chair Gary Gensler stated that existing financial regulations generally apply to most cryptocurrencies following the nod for Bitcoin ETFs. However, he noted that the approval did not broadly endorse Bitcoin or the crypto sector. Gensler characterized Bitcoin as a “non-security commodity” but was less definitive on the regulatory status of other digital assets like Ether.

Some felt Gensler’s comments unfairly painted cryptocurrencies in a negative light. Nevertheless, his assertion that most fall under existing oversight frameworks removes some uncertainty for funds seeking to offer investors structured exposure to digital assets. The wider availability of regulated crypto investment products could accelerate mainstream adoption by making digital assets accessible to traditional investors through familiar institutions and infrastructure.

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Matthew Garcia is a crypto article writer with over 5 years of experience in the industry. He is passionate about writing about the latest news and trends in the cryptocurrency space, and he has a deep understanding of the technology behind blockchain. Matthew Garcia has written for a variety of publications, including CoinDesk, The Block, and CryptoSlate. He is also a regular contributor to the blog, where he writes about the latest developments in the Ailtra ecosystem. Matthew Garcia is a skilled writer with a knack for explaining complex technical concepts in a clear and concise way. He is also a creative writer who is able to produce engaging and informative content. Matthew Garcia is always up-to-date on the latest news and trends in the crypto space, and he is always looking for new ways to share his knowledge with others.
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