iShares Ethereum Trust ETF Fails to Deliver Growth as Expected

Key Points:

• iShares Ethereum Trust ETF has underperformed compared to its highly successful Bitcoin ETF.
• Robert Mitchnick, head of digital assets at BlackRock, attributed Ethereum’s slower growth to its more complex investment narrative.

BlackRock’s new Ethereum ETF has trailed its Bitcoin counterpart in both trading volumes and inflows, a dynamic the asset manager doesn’t see changing anytime soon.

Read more: Robinhood and Revolut Are Now Considering Promoting Stablecoin 

iShares Ethereum Trust ETF Fails to Keep Pace with Bitcoin Counterpart

Robert Mitchnick, head of digital assets at BlackRock, spoke at the Messari Mainnet conference in New York about the relatively anaemic performance of iShares Ethereum Trust ETF (ETHA). On the other hand, the firm’s Bitcoin ETF, launched in January, has been incredibly successful.

Mitchnick pointed out that iShares Ethereum Trust ETF has not quite seen the exponential growth rate seen with Bitcoin’s counterpart, but still hit the high milestone. ETHA reached $1 billion in assets in seven weeks since its inception back in July.

He added that though there is a slower pace compared to Bitcoin’s ETF growth and expansion, remarkable within the greater ETF market, which usually takes several years to reach such a figure.

Bitcoin and Ethereum Appear Complementary in Investor Portfolios

BlackRock’s Bitcoin ETF, IBIT, launched explosively to garner $2 billion in AUM within just 15 days. Today, IBIT is at $24 billion in AUM and well ahead of ETHA, still hovering around the $1 billion mark.

He partly attributed this to the complexity of the investment narrative surrounding Ethereum. Mitchnick emphasized that many investors find Bitcoin more comprehensible, and use cases of Ethereum are considered more subtle. That as it may be, BlackRock is committed to making sure clients understand Ethereum’s potential and truly believe the cryptocurrency should represent a valuable addition to investor portfolios.

Despite the contrast in growth, Mitchnick believes Bitcoin and Ethereum complement one another. He said many investors could put 20% in Ethereum and 80% in Bitcoin.

Meanwhile, BlackRock is joining other large asset managers like Fidelity and ARK Invest at the forefront in cryptocurrency ETFs. While Bitcoin ETFs as an asset class have gathered $61 billion in new assets, Ethereum ETFs have collected about $7 billion since their creation.