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A senior executive of the world's largest asset management company stated that the approval of Bitcoin ETFs in the United States is driving broader integration between traditional finance and cryptocurrencies.
Tony Ashraf, Managing Director at BlackRock, spoke at the Blockworks Digital Asset Summit in London on Tuesday, highlighting the impact of major financial institutions packaging Bitcoin into ETFs.
On the other hand, companies in the crypto industry and innovators are beginning to develop traditional finance by tokenizing assets, a process involving bringing physical and financial assets onto the chain.
Ashraf stated, "The binary between traditional finance and cryptocurrencies is starting to manifest itself in a very different way due to the catalyst of [Bitcoin] ETFs." "I think...we'll see more convergence in the future."
As of December 31, BlackRock managed approximately $10 trillion in assets. The company launched one of the 10 US Bitcoin ETFs listed on January 11.
So far, from a net inflow perspective, the iShares Bitcoin Trust Fund (IBIT) has consistently led its competitors.
According to BitMEX research data, as of Monday's close, IBIT's net inflows approached $13 billion. This is nearly twice as much as the second-largest asset gatherer - the Wise Origin Bitcoin Fund (FBTC) under Fidelity Investments - which amassed $6.9 billion.
Grayscale Investments' Bitcoin Trust ETF (GBTC) remains the largest fund in the field, having net outflows of nearly $12.5 billion to date.
Opportunity to attract new client bases
Ashraf believes that with the approval of US Bitcoin ETFs, the impact of who can now allocate cryptocurrencies cannot be underestimated.
"We have a whole new group of investors entering this space who may purchase, hold, and use ETF structures in different ways," he said.
Last week, the 10 US spot Bitcoin ETFs brought in about $2.5 billion in net inflows, setting a record for the sector. BitMEX research data shows that on Monday, this category saw net outflows for the first time since March 1, totaling $154 million.
Nevertheless, Bitwise Chief Investment Officer Matthew Hougan said during Tuesday's panel discussion with Ashraf that he expects assets managed by US Bitcoin ETFs to grow from the current approximately $50 billion to several hundred billion dollars over the next few years.
Initial interest in these funds has been driven by self-directed retail investors and registered investment advisors (RIAs).
Hougan noted that Bitcoin ETFs have yet to gain widespread adoption on platforms such as Morgan Stanley, Merrill Lynch, Fidelity Bank, and UBS, as these platforms are still approving these funds for their advisors.
However, the Chief Information Officer of Bitwise expects one or more major firms to approve such funds within a week.
"You should think of the flow we're seeing into these ETFs as turning on a 20% faucet," Hougan said. "There's still 80% of the work to be done, and this process will take some time."
Leon Marshall, Chief Executive Officer of Galaxy Digital's European business, said during the panel discussion that liquidity will also increase in the future.
He added that this liquidity might spur more interest from corporations, sovereign wealth funds, and central banks.
Marshall said, "They only get interested when an asset class reaches a certain amount of assets under management." "So Bitcoin does indeed benefit from that effect, the bigger it gets, the more attractive it becomes as an asset class to new client bases." |
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Post time 28-3-2024 13:39:45
