BlackRock’s Debut Blockchain ETF Provides Clients Exposure to Crypto and Blockchain Industry

On Wednesday, April 27, world’s largest asset manager BlackRock launched its first-ever blockchain ETF with the focus on providing its clients with exposure to the emerging blockchain and crypto industry.

Dubbed iShares Blockchain and Tech ETF (IBLC), this exchange-traded fund is part of BlackRock’s “megatrend” thematic platform which has a total of 43 products and $50 billion in assets under management.

As per the filing by BlackRock, the IBLC ETF will not directly own digital assets. Instead it will seek exposure to global firms operating in the crypto and blockchain space. The IBLC ETF from BlackRock has companies with different weightage.

The largest weightage is of crypto exchange Coinbase which makes up 11.45% of the fund. The second-largest weightage is from Marathon Digital Holdings that make up 11.19% of the fund. The third is Riot Blockchain Inc. which accounts for 10.41% of IBLC’s total holdings.

Furthermore, BlackRock also seems prepared for future acquisitions as the IBLC ETF holds 9.15% in USD cash position. Along with the release of the new blockchain ETF, BlackRock has also published another report outlining the main areas of the market that are undergoing permanent changes.

The report details why BlackRock is bullish on the overall crypto sector. Furthermore, the asset management giant believes that the true potential of the blockchain technology has yet to be realised. We believe the broader opportunity — leveraging blockchain technology for payments, contracts and consumption broadly — has not yet been priced in,” it notes.

Speaking of the development, Rachel Aguirre, BlackRock's head of US iShares product said that the IBLC ETF serves as "gradual entry point into the blockchain ecosystem” with holdings into crypto miners, crypto trading platforms, and underlying technologies.

She further added: “The entire ecosystem around the blockchain has seen rapid growth these past two years, and there are a whole host of economic and societal factors driving this growth”.

Aguirre further stated that millennial generation is showing major interest in blockchain. They see it as a means of greater financial inclusion. The BlackRock executive said that blockchain technology is allowing consumers to get greater control over their data.

"We have strong conviction that we're at an inflection point, this confluence of factors is coming together," Aguirre said. "Now is the time for investors to capture what we see is going to be exponential growth from here."