BlackRock’s Mitchnick points to the lack of maturity and liquidity for XRP, ADA, SOL Coin and other altcoins to become an ETF. He also points to regulatory concerns and the SEC’s reluctance to give more space to such products. On the other side, Nate Geraci disagreed with Mitchnick, noting that there are already several crypto ETPs running successfully in Europe.
Do crypto ETFs such as ADA, XRP, SOL Coin have no chance?
As you have been following on Kriptokoin.com, spot Ethereum ETFs started trading after SEC approval. Now it is being debated whether other crypto ETFs will follow. Some experts believe that the Ethereum ETF approval will open the doors for more altcoin ETFs in the future. However, Robert Mitchnick, Head of Digital Assets at BlackRock, poured cold water on the hopes of more crypto ETFs in the future, including SOL Coin and XRP, during his speech on the opening day of Bitcoin Conference 2024.
Robert Mitchnick stated that the chances of ETFs based on other crypto assets such as SOL Coin, XRP Coin are low. Explaining his reasoning during an interview with Bloomberg’s James Seyffart at the Bitcoin Conference, Mitchnick said:
I don’t think we’re going to see a long list of crypto ETFs. If you think about Bitcoin, it represents about 55% of market capitalization today. ETH is at 18%. The next reasonable investable asset is around 3%. It’s nowhere near that threshold or its track record in terms of maturity, liquidity and so on.
Competitors are already on the move for SOL Coin!
However, Robert Mitchnick agrees that crypto as an asset class is not going anywhere. He also makes it clear that more financial firms will have the opportunity to compete in the crypto space. On the other hand, competitors like VanEck have already made the first move towards Solana ETFs.
Meanwhile, spot Ethereum ETFs are off to a dull start after their launch. These products have recorded two consecutive days of outflows, with Grayscale’s ETHE bleeding out. Also, BlackRock is trying to keep inflows going by holding the other hand. Mitchnick noted that despite the US SEC’s lack of clarity on crypto regulations, the regulator still wants to draw the line somewhere. He pointed out that the SEC is not comfortable with spot Ethereum ETFs offering a staking facility.
Nate Greaci disagrees with Mitchnick
ETH Store President Nate Geraci stated that he completely disagrees with Mitchnick’s views. Geraci pointed to Europe, where ETPs for altcoins like Solana, XRP and Cardano are already available in the market. “You only need to look at Europe to see ETPs for SOL Coin, XRP, ADA, etc. ETPs. I’m surprised BlackRock said that,” he added. On the regulatory front, Geraci noted that the launch of similar products in the US will certainly require regulatory changes, but he remains optimistic about it.
Ethereum ETF comments from BlackRock CEO
BlackRock CEO Larry Fink stated that adding staking to spot Ethereum ETFs is not currently being considered. Despite this, newly approved spot Ethereum ETFs made a successful debut this week, even without the staking income feature. The Grayscale Ethereum Trust (ETHE), which recently converted to an ETF, saw an outflow of around $811 million, while other products such as BlackRock received deposits of around $800 million in the first two days. While staking is not currently on the agenda, issuers are hopeful that the landscape could change once the new administration takes office in January and staking could eventually become part of these products.
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