Investment giant BlackRock projects that cryptocurrency-backed exchange-traded funds (ETFs) will become integral components of “model portfolios” by late 2024. This prediction, shared by BlackRock’s Chief Investment Officer for ETFs and Index Investments, Samara Cohen, signals a major development in the financial industry’s crypto acceptance.

Cohen said in a Bloomberg interview  on July 29 that financial behemoths including Morgan Stanley, Wells Fargo, and UBS are actively involved in thorough risk study, due diligence, and assessing the possible roles of Bitcoin and Ether inside their investment portfolios.

“What we anticipate toward the end of this year and into the next is the integration of these digital assets into model portfolios,” Cohen stated. “This will provide clearer insights into how investors are utilizing them.”

Modern Portfolios’ Engagement: BlackRock

Usually provided by sophisticated brokerage companies, model portfolios use a diversified investing strategy meant to balance risk and return by a clear, open approach. Acting as pre-designed investment templates, they streamline the procedures for advisers and investors both.

BlackRock sees major growth in model portfolio management, predicting an increase from the current $4.2 trillion to $10 trillion within the next five years.

Going to be Massive

Earlier this month, Salim Ramji, BlackRock’s Global Head of iShares and Index Investments, highlighted the transformative potential of model portfolios. “It’s going to be massive,” Ramji remarked, stressing their increasing importance in the operations of fiduciary advisers and, consequently, BlackRock’s collaboration with them.

Cohen also touched on the distinct qualities and use cases of Bitcoin and Ether, noting them as special asset classes with great diversification value for investment portfolios.

ETFs Performance

Since their launch in January this year, spot Bitcoin ETFs have attracted huge interest, accumulating a net inflow of $17.71 billion. Conversely, spot Ether ETFs have experienced a rocky start, with a net outflow of $439 million since their launch last week. Despite these initial challenges, the broader acceptance of crypto ETFs reflects a growing recognition of digital currencies within mainstream finance.

Meanwhile, market fluctuations continue to affect the prices of these leading cryptocurrencies. Bitcoin is currently trading at approximately $66,700, marking a decline of over 3% in the past 24 hours. Ether is also experiencing a downturn, trading at $3,315, down by 1% in the last day and 4% over the past week.