BlackRock Predicts Increase in BTC ETF Fund Flows, Sets Sights on Sovereign Wealth and Pension Funds

BlackRock Predicts Increase in BTC ETF Fund Flows, Sets Sights on Sovereign Wealth and Pension Funds
  • A slowdown in Bitcoin ETF inflows in the United States is nothing to worry about according to BlackRock.
  • The financial goliaths are now targeting investors from areas of the industry that were previously inaccessible – such as SWFs, pension funds and family offices.
  • The news comes as Hong Kong’s first day of crypto ETF trading outpaced some analyst’s predictions.

BlackRock – the world’s largest financial institution – has been making waves in the crypto industry. The team entered the scene with a bang, offering the most popular spot Bitcoin ETF before partnering up with Securitize and Coinbase to offer a tokenised service to US investors. But all of this may just be the beginning for BlackRock, who is turning its attention to education and alternative ETF investors.

Related: Analysts React to Bitcoin Dip Below $60K Amid US Rate freeze, How Low Can It Go?

Sovereign Wealth Funds and Pensions Next in Line for BTC ETFs

BlackRock burst off the blocks to secure hundreds of millions of assets under management (AUM) for its flagship Bitcoin ETF, IBIT. However, with the market in freefall, inflows have started to slow after a stellar March and April. But according to BlackRock, this halt is shaping up to be temporary, with new investors from different areas of the financial world anticipated to start investing in the industry.

Robert Mitchnick, Head of Digital Assets, spoke to some of the new entities he believes will start targeting IBIT and other similar ETFs in the coming months:

Many of these interested firms – whether we’re talking about pensions, endowments, sovereign wealth funds, insurers, other asset managers, family offices – are having ongoing diligence and research conversations, and we’re playing a role from an education perspective.

Robert Mitchnick, Head of Digital Assets at BlackRock

According to Mitchnick, BlackRock’s role as an educator in this space is not novel – the institution has been engaged in research and discussion with several high-profile institutions since the early 2020s. This statement comes in stark contrast to sentiment just a few years ago, when “safe” investors like insurers, SWFs and pensions wouldn’t touch crypto with a ten-foot pole. Although they may take some convincing, cryptocurrency having BlackRock as an ally is a fantastic coup for the scene.

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Meanwhile, Hong Kong’s position as a crypto hub for the APAC region has been strengthened by excellent inflows in the first day of ETF trading. Local ETFs raked in approximately USD $292M (AUD $443M), with ChinaAMC Bitcoin ETF leading the way. While some investors felt HK’s crypto ETF market was set up to fail, the impressive numbers may help lead a turnaround in the market after Bitcoin sunk below USD $60K (AUD $91K) over the weekend.

We just put out note with final data (which doesn’t come in as fast as US). In short, HK saw $292m in assets on Day One (we predicted $1b in two years so way ahead of schedule but corrections can derail trajectories as we seeing in US). Ether ETFs grabbed 15% of pie and size… https://t.co/RT8SvMvEuA

— Eric Balchunas (@EricBalchunas) May 2, 2024

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