Impact on Altcoin ETFs in the Absence of BlackRock: What’s Next?

Key Points

• Bitcoin Exchange Traded Funds (ETFs) have seen net inflows of $26.9 billion this year, largely due to BlackRock.
• Questions arise about the future of altcoin ETFs without BlackRock’s involvement.

In 2021, Bitcoin ETFs have experienced significant net inflows, reaching a total of $26.9 billion, according to K33 Research.

The lion’s share of this influx was provided by leading asset management company, BlackRock, which accounted for a total of $28.1 billion, offsetting losses from other issuers like Grayscale Investments.

BlackRock’s Influence on Bitcoin and Ethereum ETFs

The fact that Bitcoin ETFs recorded $26.9 billion in net inflows this year, with a major portion coming from BlackRock, is clear.

Specifically, the BlackRock iShares Bitcoin Trust ETF (IBIT) brought in $28.1 billion in inflows. This indicates that without this fund, Bitcoin ETF flows would be in the negative.

The same upward trend was observed with the BlackRock iShares Ethereum Trust ETF (ETHA), which dominated inflows on several occasions.

However, BlackRock has chosen to abstain from the current wave of altcoin ETFs that is now gaining momentum.

Asset managers like 21Shares, Canary Capital, Fidelity, and others have all submitted filings for one or more altcoin ETFs with the United States Securities and Exchange Commission (SEC) in the past year.

Unlike these companies, BlackRock has not made a similar filing. Given the robust performance of the first two crypto ETFs, future funds may encounter difficulties in gaining the same level of traction.

In other words, despite the considerable hype surrounding their listings, their overall inflows could be constrained.

Altcoin ETFs Pending SEC Approval

In mid-October, VanEck submitted a filing for the Lido Staked Ethereum ETF with the US SEC. This filing came just a week after it registered a statutory trust for the same Ethereum ETF in Delaware.

This fund aims to track spot Lido Staked ETH (stETH) prices based on MarketVector’s LDO Staked Ethereum Benchmark Rate index.

In August, Bitwise Asset Management filed an S-1 with the US SEC to launch a spot Chainlink ETF to track the price of LINK.

The filing details suggest standard creation and redemption mechanisms, with the trust able to process both in-kind and cash transactions.

This would be achieved through a “Trust-Directed Trade” system managed by the prime execution agent. Interestingly, these altcoin ETFs are still awaiting SEC approval.