BlackRock has very little interest in cryptocurrencies beyond Bitcoin and Ethereum.
The asset manager believes these two are investors' primary focus, which means we might not see further ETF applications.
Franklin Templeton, on the other hand, doesn't think so. Solana is still a very viable option.
Analysts are now calling the Ethereum ETF launches a "sell-the-news" event.
Some experts predict further declines due to the ongoing grayscale outflows, while others expect a rebound.
So far, the market has seen a Bitcoin and, more recently, a spot Ethereum ETF.
But what about other cryptocurrencies on the market? What are their odds of approval, and how do they compare to Bitcoin and Ethereum?
One of the major setbacks of spot crypto ETFs is the issue of regulatory pressure.
The US Securities and Exchange Commission, under its current chair, Gary Gensler, has taken a harsh stance against crypto in general over the last five years.
This week, the agency only officially recognized Ethereum as a commodity rather than a security, which has created uncertainty over less decentralized blockchains like Solana and XRP.
However, more than the "security versus commodity" argument, according to BlackRock, there might be an even lesser chance of further crypto ETFs because "there is very little interest" in them.
Let’s go over BlackRock’s outlook, and the odds of a Solana, XRP or even a Polkadot ETF.
According to Robert Mitchnick, the head of digital assets from BlackRock, at the recent Bitcoin 2024 conference held on 25 July in Nashville, Tennessee, there is "minimal interest" in cryptocurrencies aside from Bitcoin and Ethereum.
“Our client base today is mostly interested in Bitcoin first, and then ‘somewhat’ in Ethereum,” Mitchnick stated during a panel titled "From Strategy to Innovation: BlackRock's Bitcoin Journey."
He further said there is "very little interest today beyond those two."
Because of this outlook, Mitchnick stated that he doesn't expect any more crypto ETF launches (or filings) beyond the company's iShares Bitcoin Trust (IBIT), launched in January, and the recently approved iShares Ethereum Trust ETF (ETHA) introduced in July.
“I don't think we're gonna see a long list of crypto ETFs,” the BlackRock official remarked.
At the same time, it is important to note that BlackRock isn’t the only asset manager with a horse in the race.
While BlackRock has remained conservative regarding other ETFs, others, like Franklin Templeton, remain highly interested, particularly in Solana.
In a tweet from this week, the asset manager said, "Besides Bitcoin and Ethereum, there are other exciting and major developments that will drive the crypto space forward."
The asset manager then went further to mention Solana directly, adding to the wave of investor enthusiasm around the cryptocurrency.
In summary, Mitchnick opines that Bitcoin has more market dominance than Ethereum. However, both of these cryptocurrencies are complementary, not competitors.
“The whole store of value [argument] is pretty definitive territory that Bitcoin owns,” he said. “ETH is trying to do a bunch of different applications that […] Bitcoin is not trying to do. So, really, they're more complements than they are competitors.”
The Bitcoin ETF market has been moderately green in the last two days, with $44 million on 24 July and $31 million on 25 July.
On the other hand, the spot Ethereum ETFs were launched this week and have experienced some turbulence.
On the first day of trading, the market saw net inflows of $107 million, which were followed by harsher outflows of $113 million the following day, on 24 July.
As of writing, the market has seen another wave of outflows worth $152 million on 25 July, with Julio Moreno, head of research at CryptoQuant, describing the launch as a "sell-the-news event."
"Open Interest is up as prices decline," Moreno opined, in reference to the $346 million worth of outflows from Grayscale, which came before the -$326 million the day before and the -$484 million on launch day.
Michael van de Poppe referenced this trend from Grayscale as an “$800 million outflow that is comparable to 8% of the actual trust”.
Van de Poppe believes that the Ethereum market will continue to decline until the "massive amount of outflow stagnates or goes sub $100 million".
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