BlackRock says 'exotic' ETF structures not part of its crypto strategy

BlackRock’s digital assets head, Robert Mitchnick,said the $14 trillion asset manager won’t get too creative with the types of crypto exchange-traded funds it offers, even as it launched a staking-focused Ether ETF on Thursday.

Speaking on CNBC’s Crypto World segment on Friday, Mitchnick acknowledged that some of the crypto ETF structures that other asset managers are experimenting with may appeal to certain investors, but said BlackRock will continue to take a more measured approach:

"Will we see some more exotic structures coming into the space? I think no question,” Mitchnick said. “Some of those will be interesting. Some of them will resonate with investors.”

However, “We will take a discerning approach in thinking about where else we would expand in this.”

Mitchnick speaking on CNBC’s Crypto World segment on Friday. Source: CNBC

Mitchnick said that while overwhelming investor interest is in Bitcoin (BTC) and Ether ($ETH), BlackRock is also seeing “pockets of interest in some of the other assets as well.”

“We continue to evaluate those as conditions evolve and as maturity, liquidity scale and use cases develop, but we take a very discerning approach in terms of what we would put in an iShares ETF.”

BlackRock launched the iShares Staked Ethereum Trust (ETHB) on Thursday, which saw over $15.5 million in trading volume and $43.5 million in inflows on debut, according to Farside Investors data.

ETHB enables investors to capture yield through Ethereum staking rewards on top of potential price appreciation in Ether’s price.

ETHB is BlackRock’s second Ether product, following the iShares Ethereum Trust ETF (ETHA), which has accumulated almost $12 billion worth of inflows since launching in July 2024.

BlackRock has a Bitcoin income-generating ETF in the works

BlackRock is also looking to offer a Bitcoin Premium Income ETF, which would sell covered call options on Bitcoin futures, collecting premiums to generate yield.

The regular distributions to investors would, however, trade away potential upside from investing in BlackRock’s iShares Bitcoin Trust $ETH (IBIT), which mirrors Bitcoin’s spot price.

Related: Bitcoin ETFs add $251M as Goldman Sachs tops XRP ETF holders

Speaking of IBIT, Mitchnick noted that investors of BlackRock’s flagship Bitcoin product have been “disproportionately long-term buy and hold” investors —even when there’s been strong selling pressure elsewhere in the Bitcoin ecosystem.

“They've tended to opportunistically buy the dips,” Mitchnick said of the investors in IBIT, which has taken in over $63 billion worth of inflows since launching in January 2024.

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