BlackRock’s Strategic Foray into Digital Assets: Bitcoin Outpaces Ethereum in Institutional Adoption
As the financial world advances into 2025, BlackRock is significantly ramping up its involvement in digital assets. A distinct gap in institutional adoption between Bitcoin and Ethereum is becoming more evident. In a revealing discussion on the Empire podcast, Samara Cohen, Senior Managing Director and Chief Investment Officer of ETF and Index Investments at BlackRock, offered insights into why Bitcoin dominates over Ethereum in client interest and portfolio inclusion.
BlackRock’s Bold Step with iShares Bitcoin Trust
BlackRock’s introduction of the iShares Bitcoin Trust (IBIT) marked a transformative phase in the company’s digital asset strategy. Cohen highlighted the key factors behind this launch: a solid investment thesis, robust client demand, readiness of the market, and the regulatory environment. Before receiving any regulatory approval, BlackRock’s decision to launch IBIT was deeply rooted in the investor’s strong desire to include Bitcoin in diversified portfolios.
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The IBIT launch was not BlackRock’s first venture into Bitcoin. The firm had previously launched a private Bitcoin trust for institutional clients in 2022, a significant milestone that allowed them to become familiar with workflows and risk management. Cohen noted, “We didn’t get hands-on with actual Bitcoin until we launched that institutional product in 2022. It was a critical institutional moment for us.”
The Unprecedented Demand for Bitcoin
The demand for Bitcoin exceeded expectations, with IBIT emerging as the most successful ETP launch in history. Cohen attributes this success partly to a previously untapped investor segment, noting that about half of IBIT’s holders are self-directed investors. A significant portion of these investors opened brokerage accounts specifically to invest in their first ETP, driven by the desire to possess Bitcoin within this framework.
Comparing Bitcoin and Ethereum
In contrast, the institutional demand for Ethereum appears more subdued. Although BlackRock has introduced Ethereum-based ETPs, Cohen mentioned that Ethereum remains a “distant second” in terms of investor interest. While Bitcoin is increasingly viewed as a store of value and a unique asset class, Ethereum’s investment narrative is still forming at the institutional level.
Cohen discussed the complexities institutions face when assessing Ethereum, stating, “You might be really bullish on the utility of the public Ethereum blockchain, but not know how that translates into value accrual to the native token.” This uncertainty creates challenges for broad adoption. Bitcoin’s narrative as a “borderless store of value” is clear, while Ethereum’s positioning involves complex questions about technology, token economics, competition, and market dynamics.
The Challenges of Standardization in Crypto
Beyond narrative discrepancies, Cohen pointed out the structural challenges posed by the lack of standardized data and metrics in the crypto space. She compared this to traditional markets, where metrics like cash flow, governance, and transparency are essential. “Crypto broadly has a data and standards problem,” Cohen emphasized, questioning how to apply indexing, a fundamental market organizing technology, in the crypto world. The absence of foundational standards complicates the integration of leading crypto assets into traditional portfolios.
Bitcoin stands out due to its clear metrics on scarcity, issuance schedule, and market infrastructure maturity, making it more compatible with conventional portfolio models. BlackRock suggests a 1-2% Bitcoin allocation for investors seeking exposure, based on detailed risk analysis. Cohen warned, “Exceeding a 2% allocation can exponentially increase overall portfolio volatility.”
While Ethereum continues to advance technologically, particularly in decentralized finance and on-chain applications, BlackRock maintains that institutions need clarity, standardization, and clear valuation models before allocating significant capital. Cohen concluded, “Creating a valuation framework for Ethereum or any other token is complex.”
As of the latest market data, Bitcoin is trading at $95,120.
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