Crypto ETFs are bringing BlackRock new investors

BlackRock’s spot Bitcoin exchange-traded fund has been a gateway for new investors to enter the wider ETF market, according to Jay Jacobs, US head of equity ETFs at BlackRock.

Around three-quarters of investors in BlackRock’s iShares Bitcoin Trust ETF have never owned an ETF before, Jacobs told Cointelegraph on the Chain Reaction podcast Thursday.

“IBIT was a way for traditional investors to now get into digital assets. But we have seen a lot of people really kind of enter into IBIT, starting with digital asset ETPs,” he said. — Cointelegraph report

The Great Convergence

This is what BlackRock calls what is happening in the markets today and I think it's rather interesting and perhaps a suggestion of where things might be headed.

When a company says that 75% of attracted investors to a particular new product never bought anything in a similar category with them previously, it goes to prove what the actual incentive is.

I believe that the act of these investors to begin investing in other ETFs at the company is an indication of what the "new market" thinks of traditional opportunities.

Most people reading this story will focus on the fact that a lot of Bitcoin ETF buyers are now investing in traditional assets ETFs, when the real data worth looking at is that they were investors who didn't believe investing with said company was worth it until Bitcoin.

Bitcoin is the reason they got there, it's only natural that they explore other offerings.

I think it's rather bullish to read that completely new investors thought that an exposure to Bitcoin was the best bet in the face of current market and if we look at what else these investors are buying, the signal is almost too clear.

Many of those investors are buying other BlackRock funds like the S&P 500 (IVV), AI (BAI), and gold (IAU).

What I see is hedged bets with an emerging market bet.

In totality, these investors are securing exposure to two "high-potential" markets being Bitcoin and AI, whilst hedging with Gold and the S&P 500 (IVV).

Of a surety, all these bets are high risks and none is generally a defined hedge but my definition of hedge in this case is that both could act as a capital safety net against the high risk of other assets in the portfolio. The growth potential of companies in the S&P 500 (IVV) and gold (IAU), generally considered sustainable medium-to-long-term bets, could offsets potential losses that could arise from exposure to much high risk ETFs being Bitcoin and AI.

Notwithstanding, in any case that this argument fails to hold up, I believe it's still worth appreciating that completely new ETF investors are onboarded via the Bitcoin exposure incentive and that proves a real-world thirst for alternative assets, even though it's unfortunate that said attracted investors aren't comfortable choosing self-custody.

Posted Using INLEO