BlackRock Explains Why Ethereum ETF Inflows Are Slow, Sees More Potential

Robert Mitchnick, the head of digital assets at BlackRock, recently admitted that the trading volumes and inflows for spot Ethereum ETFs are quite underwhelming against their Bitcoin counterparts. As we know, the market for Ethereum ETFs has turned dull and boring with not enough takers for the asset class, against the strong demand for Bitcoin.

BlackRock – Ethereum ETFs Face Adoption Challenges

During his address at the Messari Mainnet conference in New York, Mitchnick said that the performance of their Ethereum ETF (ETHA) has been below par when compared to its Bitcoin ETF BITB. Last week, the SEC also also postponed the decision of options trading for BlackRock Ether ETF.

However, he urged the audience to compare ETHA with the rest of the ETF market. Last week, BlackRock’s ETF for Ethereum (ETHA) crossed an important milestone of over $1 billion in net inflows since its launch. Additionally, the asset manager itself has been on a strong Bitcoin buying spree after the Fed rate cuts. Speaking on these lines, Mitchnick said:

“It’s very rare that you see an ETF get to a billion AUM in seven weeks, as ETHA did. In most cases, it takes multiple years to never for a new ETF to get to a billion.”

BlackRock was one of the forerunners to launch the spot ETFs for both – Bitcoin and Ethereum – this year. But its Bitcoin ETF (BITB) stormed the market raking more than $2 billion in inflows within just the first 15 days of launch. In comparison, the ETHA debut has been less appealing taking over 2 months to reach the first $1 billion in AUM.

“With ETH, I think the investment story and narrative is a bit less easy for a lot of investors to digest, so that’s a big part of why we’re so committed to the education journey that we’re on with a lot of our clients,” Mitchnick said.

He added that investors shouldn’t expect them to be quite large with inflows that of the Bitcoin counterparts.

Bitcoin ETF vs Ether ETF

With Bitcoin being the world’s largest cryptocurrency, it certainly enjoys the first mover’s advantage over other digital assets in the market. This is the reason the SEC approved spot Bitcoin ETF nearly six months before the Ethereum ETF.

Since the launch in January, the spot Bitcoin ETFs have accumulated more than $61 billion in AUM with BlackRock leading the funds. This shows an overwhelming demand clearly in place for the Bitcoin fund. Furthermore, following the Fed rate cuts in September, the inflows in spot Bitcoin ETFs have surged again clocking over $1 billion last week.

On the other hand, Ether ETFs have failed to show similar demand despite the rate cut announcement. On Monday, the Ether ETFs saw $12 million in outflows while the Bitcoin ETFs saw over $61 million in inflows.

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