- Big investors are focusing mostly on Bitcoin.
- Uncertainty is driving the interest.
- Altcoins continue to get faded.
Institutions only care about Bitcoin right now.
At least that’s according to Samara Cohen, BlackRock’s CIO of ETF and Index Investments.
“Institutional investors are really largely focused on Bitcoin,” Cohen said on the Blockworks Empire podcast on Monday.
“Particularly in this environment.”
This laser focus on Bitcoin from Wall Street’s biggest players reveals that during times of uncertainty, the top cryptocurrency is the only serious contender in crypto.
With the ongoing global trade war, which has forced investors to de-risk portfolios, Bitcoin’s narrative as an uncorrelated asset has begun to resonate.
Some investors have even said that Bitcoin has ‘decoupled’ from equities — a recent development that suggests it’s not just another risky asset like stocks.
Bitcoin is up almost 7% over the past week to about $94,800, outperforming equities, while the dollar drifts lower.
Meanwhile, Bitcoin exchange-traded funds have pulled in $3.3 billion in the past week, according to Bitwise Chief Investment Officer Matt Hougan. Bitcoin ETFs now hold 1.1 million Bitcoin, worth $106 billion.
‘Distant second’
Cohen also dampened the mood for investors still hopeful of an altseason — a period when interest and price skyrockets for tokens that aren’t Bitcoin.
“It is very unclear what the investment thesis is for a very broad array of altcoins,” she said. Even Ethereum, which has its own ETF and served to launch BlackRock’s tokenised fund dubbed BUIDL, “comes in a distant second.”
Four wallets hold most of the $2.5 billion BUIDL fund.
The market size for Ethereum ETFs is a fraction of that of Bitcoin, with total assets under management is $8.5 billion, according to Coinglass.
Adding to the dismay of Ethereum backers has been the token’s lacklustre price action. It is yet to reach its previous all-time high of $4,848, reached in November 2021. The network’s market value sits at $219 billion.
But investors who are waiting for another altseason might have to be patient.
In fact, 70% of 50 hedge funds that manage more than $5 billion expect Bitcoin’s dominance to continue growing, according to a report from Crypto Insights Group.
‘Decoupling’
Cohen’s perspective aligns with that of another BlackRock executive, Jay Jacobs, US head of equity ETFs.
Last week, Jacobs said: “If you zoom out, you tend to see the longer term fundamental thesis of Bitcoin really drives it to behave differently to traditional assets.”
This is pushing institutional investors — traditionally 60% invested in equities and 40% invested in bonds — to “figure out what the new sources of return and diversification will be for them,” Cohen said.
“That’s what’s bringing them to private markets, and to Bitcoin specifically.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
