This year could be the year that Main Street interest in cryptocurrencies increases meaningfully.
It’s been two years since the first spot Bitcoin ETF began trading on U.S. exchanges, but BlackRock’s Jay Jacobs believes Bitcoin ETFs are a fairly new concept.
“It’s still too early,” the company’s head of U.S. equity ETFs told CNBC’s “ETF Edge” this week. “Many investors are still just beginning to learn what Bitcoin is. [and] How does it fit into your portfolio… We believe Bitcoin and Ethereum are still in their early stages. ”
BlackRock manages the iShares Bitcoin Trust ETF (IBIT) and the iShares Ethereum Trust ETF (ETHA). As of Thursday’s market close, IBIT is down more than 3% over the past year. This weakness comes after Bitcoin prices hit an all-time high of around $126,000 in October last year. It is currently trading in the low $90,000 range.
Meanwhile, ETHA is down about 6%.
Cryptocurrencies have been getting a lot of attention lately, driven in part by the fact that large asset managers, including BlackRock, are expanding the options traders can invest in cryptocurrencies using stock-like formats such as ETFs.
“For many financial advisors, they may not have had access to cryptocurrencies before or were unable to purchase IBIT before being approved on the platform,” Jacobs said.
But for those who take the plunge, the asset class instills loyalty despite bouts of volatility, says VettaFi’s Todd Rosenbluth.
“They’re sticking with it and not necessarily selling out right away, and looking for another replacement quickly,” Rosenbluth told CNBC in the same interview.
Rosenbluth acknowledges that despite the uncertainty, crypto investors are essentially unmoved.
“This shows that investors looking to gain exposure to cryptocurrencies through ETF wrappers have some level of loyalty to the product and confidence in the long-term trends,” Rosenbluth said. “They’re not necessarily moving in or moving out based on that volatility.”
