Model Portfolios Will Include Crypto ETFs By the End of 2024, Says BlackRock

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BlackRock predicts that crypto ETFs will enter model portfolios by late 2024. The firm’s chief investment officer for ETFs, Samara Cohen, mentioned that many investors desire ETH exposure. Cohen also noted the usefulness of Bitcoin and Ether as portfolio diversifiers.

Meanwhile, the newly launched ETH ETFs have recorded substantial outflows, with Grayscale’s ETHE ETF leading the charge with over $1.72 billion.

Model Portfolios To Include Crypto ETFs By Year-End

During an interview with Bloomberg on July 29, BlackRock’s chief investment officer for ETFs, Samara Cohen, gave a bullish prediction for crypto ETFs. Cohen believes crypto-backed ETFs will enter “model portfolios” by late 2024.

BlackRock CIO of ETF and Index Investments Samara Cohen discusses the iShares Ethereum Trust ETF (ETHA) and expects we'll see allocation of crypto ETFs in model portfolios by the end of this year and into 2025 https://t.co/5UOLwIRWHL pic.twitter.com/rYqpym7Wqg

— Bloomberg Crypto (@crypto) July 29, 2024

Also, the anchor asked Cohen about the position of big shots like Morgan Stanley, UBS, and Wells Fargo regarding promoting and onboarding crypto ETFs. 

Cohen responded that the big shots conduct due diligence by performing risk analysis. According to her, the wirehouses seek to uncover the relevance of Bitcoin and Ether in their portfolios before investing.

Also, she forecasted massive ETF allocations into model portfolios from late this year to next year.

Cohen stated: “What will happen toward the end of this year and into next year is we will see allocations into model portfolios, which will give us much more of a steer into how investors are using them.” 

Currently, model portfolio management’s net worth is around $4.2 trillion. However, BlackRock anticipates its growth to $10 trillion over the next five years.

Full-service brokerage companies and big shots offer model portfolios. These portfolios usually rely on diversified investment approaches and target a balance of risk and return-based earnings on transparent investment strategies.

Cohen pointed out the relevance of Bitcoin and Ether in diversifying portfolios despite their difference in use cases and asset classes. She noted that the two leading crypto tokens are valuable investment portfolio diversifiers.

The Trend In Spot Ethereum ETFs Net Outflows

Further, Cohen spoke about the spot ETH ETFs and their overall outflows since launch. She said that ETH ETFs kicked off strongly after the SEC’s approval.

Also, Cohen mentioned that the ETFs provide access for investors who desire to accumulate Ether in their portfolios.

However, she acknowledged that the funds have recorded several outflows, especially from the high-priced ones. This refers to the Grayscale Ethereum Trust (ETHE) and possibly from proxy vehicles.

Cohen stated: “Investors really want to get their ETH exposure, especially if they’re going to use it in the context of an overall portfolio in an ecosystem they have confidence in.”

According to data from Farside Investors, the spot ETH ETFs have recorded four consecutive days of outflows. Since their launch, the funds have seen only a single day of overall inflow.

Most of these outflows come from the Grayscale Ethereum Trust (ETHE). Since its conversion, ETHE has lost more than $1.72 billion, though about 10% flowed into its zero-fee Ethereum Mini Trust.

Meanwhile, Cohen soon reacted to the trending rumors regarding a potential altcoin ETF. She stated that a spot ETF for altcoins like Solana can’t possibly emerge in the industry soon.

Also, BlackRock’s head of digital assets, Robert Mitchnick, shared that same opinion about altcoin ETFs. In his speech during the Bitcoin 2024 conference, Mitchnick said there won’t be a long list of crypto ETFs.