BlackRock, the world’s largest asset manager, has reaffirmed its belief that Bitcoin and Ethereum are the only cryptocurrencies worth investing in. According to Arkham Intel, as of January 2, 2024, BlackRock’s crypto portfolio is primarily composed of Bitcoin and Ethereum, which account for over 99% of its holdings.
Leading the way, BlackRock holds 550,643 BTC, valued at $52.93 billion, with Bitcoin currently trading at $96,125. It also holds 1.037 million ETH, collectively worth $3.58 billion at $3,454 per token. Bitcoin recently experienced a modest 2.79% increase, adding $1.53 billion to its value, while Ethereum saw a 2.59% gain, increasing by $89.61 million.
BlackRock’s CEO, Larry Fink, has characterized Ethereum as an asset rather than a currency, reflecting the firm’s strategic focus. BlackRock is now the 12th largest holder of Ethereum 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 receiving SEC approval, a significant milestone following Grayscale’s legal victory against the SEC. The ETF’s impressive performance helped drive Bitcoin’s price above $100,000 earlier this year, with assets under management surpassing $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 BlackRock’s Bitcoin ETF could outperform SPDR Gold Shares, the leading gold ETF, by 2025, assuming Bitcoin maintains its upward momentum.
BlackRock’s focus on Bitcoin and Ethereum reflects investor sentiment, with little interest in other cryptocurrencies among their clients. This view highlights the challenges faced by alternative coins in gaining institutional traction.
Despite the concentration in Bitcoin and Ethereum, BlackRock’s portfolio includes holdings in stablecoins like USDC ($77.40 million) and lesser-known tokens such as COLLE, SPX, and MOG, although these make up only a small fraction of the total.
In contrast, 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 the adoption of alternative coins.
BlackRock’s Ethereum-focused ETF marked another milestone for the asset manager. Approved by the SEC earlier this year, the fund raised Ethereum’s profile as a blockchain platform for decentralized applications and smart contracts, in addition to its status as an asset of institutional interest.