BlackRock’s spot Bitcoin exchange-traded product (ETP) is bringing in a crowd Wall Street isn’t used to seeing. A ton of first-timers who are just crypto investors.
You see, the crypto industry thought these ETFs were going to bring in a flood of TradFi investors to our side, but turns out it’s just mostly our people over there.
Wall Street isn’t taking over Bitcoin as people feared, Bitcoin is taking over Wall Street. And it is an almost-perfect turnout.
A new breed of investor
Samara Cohen, Chief Investment Officer of ETFs and Index Investments at BlackRock, recently said there was just so much demand for Bitcoin that her team jumped in and launched one in January.
But it wasn’t about Bitcoin, it was about offering a better, easier way to access it. As she put it, “It was for the ETF wrapper.”
And oh that ETF wrapper is paying off big time. The total market cap of all eleven spot Bitcoin ETFs has now hit $63 billion. In just five days, they pulled in $2.1 billion, and BlackRock accounted for half of that action.
Bitcoin itself is flying high, trading at over $68,000 today for the first time since July. Crypto stocks are performing incredibly well too, with Coinbase and Marathon Digital coming out on top.
The most interesting part? BlackRock’s data shows that 80% of its ETF buyers are direct investors, and of that group, 75% are new to iShares, which is the biggest ETF platform on the planet.
Cohen and her team initially thought they’d be educating TradFi investors about Bitcoin. But the reality is not that at all.
Before the SEC approved spot Bitcoin funds in January, the main options for investors were centralized exchanges. But now, with ETFs, there’s more security and transparency, and it’s making a huge difference.
Waiting on clear rules
America remains the largest crypto market in the world. Chainalysis reports that North America accounts for nearly 23% of all crypto trading. Between July 2023 and July 2024, the region received $1.3 trillion in on-chain value.
While Manhattan seems to be partying with Bitcoin, not everyone is impressed. Vanguard, oddly BlackRock’s largest shareholder and top competitor, has explicitly said that it will never offer Bitcoin to US investors.
And despite the excitement, Wall Street is still holding back when it comes to fully embracing Bitcoin. What’s stopping them? Clear regulations.
Until lawmakers in Washington set clear rules, many financial institutions are hesitant to go all-in on crypto. Still, Cohen believes ETFs are creating much-needed transparency in the market.
She believes ETFs have been a big part of democratizing the financial world. She pointed out that Bitcoin’s whitepaper was released in 2008, right around the time the financial crisis hit.
At that moment, world leaders were scrambling to make the financial system more transparent, and ETFs were one of the tools that rose out of that crisis.
BlackRock, like other TradFi companies, has played it safe. They use counterparty clearing and multilateral trading (standard methods in traditional markets) to keep their risks low.
Cohen doesn’t see this as a win for Bitcoin or ETFs specifically. Instead, it’s a win for investors who can now take advantage of both ecosystems.
