Only Bitcoin and Ethereum Viable for ETFs in the Near Future

BlackRock: Only Bitcoin and Ethereum May Be Eligible for ETFs in the Near Future

Samara Cohen, Chief Investment Officer of ETF and Index Investments at BlackRock, the world’s largest asset management company, said that the only cryptocurrencies that will be traded through ETFs in the near future will be Bitcoin and Ethereum.

In an interview with Bloomberg TV, Cohen explained that Bitcoin and Ethereum meet BlackRock’s strict criteria for exchange-traded funds (ETFs), but no digital asset currently comes close. “We really look at investability and see what the criteria are, what the bar is that an ETF needs to deliver on,” Cohen said. “Both from an investability perspective and what we’re hearing from our clients, Bitcoin and Ethereum definitely meet that bar, but it’s going to be a while before we see anything else.”

Beyond the technical challenges of launching new ETFs, Cohen emphasized that the demand for other cryptocurrency ETFs, particularly Solana, is not yet there. Despite Solana being touted as the next potential ETF candidate, Cohen noted that market appetite remains lacking.

BlackRock’s focus on Bitcoin and Ethereum ETFs comes after last week’s successful launch of its Ethereum ETFs, which saw the crypto funds’ weekly trading volume hit $14.8 billion, the most since May. That success has spurred speculation about the next possible ETF, with Solana frequently mentioned as a contender.

Solana, known as a faster and cheaper alternative to Ethereum, has seen two separate ETF applications in the U.S. by VanEck and 21Shares. However, unlike Bitcoin and Ethereum, Solana does not have CME futures, which poses a significant hurdle for the SEC to approve a Solana ETF.

Despite these challenges, some fund managers remain optimistic about Solana’s potential. Franklin Templeton recently described Solana as “an exciting and major development that we believe will move the crypto space forward.” Solana currently represents about 3% of the total crypto market cap, with a market capitalization of $82 billion, according to CoinGecko data.

Meanwhile, Bitcoin investors continue to show strong support as evidenced by significant inflows into BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT). On July 22, IBIT reported $526.7 million in inflows, the highest single-day tally since March. This impressive gain contrasts sharply with the collective inflows of just $6.9 million seen across the remaining 10 Bitcoin ETFs, according to data from Farside Investors. IBIT’s surge in inflows coincides with Bitcoin trading above the pivotal $68,000 level, just 8% off its all-time high of $73,000.