BlackRock Becomes Ethereum Whale with $3.5B in ETH

BlackRock Benefits from Spot Ethereum ETF

BlackRock’s substantial Ethereum acquisition was made through its Ethereum Exchange Traded Fund (ETF), identified by the ticker ETHA. As of December 27, the firm’s Ethereum holdings represent about 0.12% of Ethereum’s total supply, reinforcing its position in the cryptocurrency market.

This move follows the approval of spot Ethereum ETF applications by the United States Securities and Exchange Commission (SEC) in July 2024. The approval was a significant development, as BlackRock was one of eight firms granted permission to launch Ethereum ETFs after a long regulatory wait. The approval provided an opportunity for investors to gain exposure to Ethereum in a more traditional financial format.

Ethereum Price Struggles Post-ETF Approval

Despite the positive developments surrounding Ethereum and the approval of the spot Ethereum ETF, the price of ETH has experienced some struggles. Following the approval of the ETFs, Ethereum saw notable growth. Additionally, Donald Trump’s victory in the U.S. presidential elections in November further contributed to the price rally.

As of now, Ethereum is trading at $3,313.42, having lost 1% of its 24-hour price gain. The coin has been unable to break past the crucial $4,000 psychological level, despite surpassing this mark earlier in December, reaching a peak of $4,077 on December 6. Ethereum has been experiencing consolidation, struggling to gain sustained momentum above the $4,000 level.

Crypto analyst Rekt Capital has noted that Ethereum could potentially see a decline of up to 10% from its current price if it fails to regain upward momentum. This presents some uncertainty in Ethereum’s short-term price outlook, especially as it hovers around critical levels.

BlackRock’s Bitcoin ETF Faces Setbacks

BlackRock’s involvement in the cryptocurrency market is not limited to Ethereum. The firm’s Bitcoin ETF, the iShares Bitcoin Trust ETF (IBIT), has also seen significant success, although it recently faced challenges.

On December 24, IBIT recorded its largest outflow to date, amounting to $188.7 million. This outflow occurred just as U.S. spot Bitcoin ETFs experienced a wave of withdrawals, with over $1.5 billion exiting the market. The timing of these withdrawals coincided with broader market volatility, raising concerns about short-term investor sentiment.

Despite this setback, there is optimism that the outlook for both Ethereum and Bitcoin ETFs could improve in the coming weeks, especially with the potential for political and market shifts, such as Donald Trump’s impending return to office.

Conclusion

BlackRock’s acquisition of nearly $3.5 billion worth of Ethereum through its ETH ETF marks a significant step in its crypto investment strategy. However, despite the firm’s growing Ethereum holdings, the altcoin faces challenges with price consolidation and competition in the broader market. Meanwhile, BlackRock’s Bitcoin ETF has experienced a setback with large outflows, though the outlook remains cautiously optimistic as the market adapts to changing conditions.