Investors Now Want Crypto Just as Much as ETFs

The people want ETFs. And in those ETFs they want equities … and crypto.

Those are the two most important categories to retail investors, according to data from a survey commissioned by BlackRock, which included 5,000 respondents in July and August. The report, published Thursday, shows changing priorities, particularly among young investors. While 66% of US investors said they owned individual stocks, 43% reported holding mutual funds. Bonds (29%), crypto assets (27%) and ETFs (23%) were behind. Still, ETFs are the fastest-growing category, and investors who already own them said they are most likely to buy equity (83%) and crypto (36%) funds during the next year. But among those who don’t yet own ETFs and plan to, there is nearly equal demand for equity (51%) and crypto (47%).

“We’re witnessing a pivotal moment as individual investors embrace ETFs for their efficiency and transparency,” BlackRock head of US direct investing Amy Jenkins said in an announcement. “The predicted surge in first time ETF investors reflects a broader shift in investor preferences toward simplicity, accessibility and digital-first experiences.”

An ETF Buffet to Rival Golden Corral

Next year, of course, they’ll have plenty of options. The Securities and Exchange Commission has all but turned on a fire hose for new products, recently allowing the big exchanges to use generic listing standards for new ETFs. That’s a golden ticket for issuers who have been waiting for months to launch spot-price crypto ETFs, including those focused on a smorgasbord of meme coins. Some products have already started coming to the market, the most recent of which include index funds of spot crypto: the 21Shares FTSE Crypto 10 Index ETF (TTOP) and FTSE Crypto 10 ex-Bitcoin Select Index ETF (TXBC). Those ETFs, which launched Thursday, apply market cap weightings and hold a variety of Swiss-domiciled crypto exchange-traded products to fill in where spot-price products are not yet available domestically. Another Thursday debut was the Canary Capital XRP ETF (XRPC).

“It feels just like another S&P 500 ETF,” said Federico Brokate, global head of business development at 21shares, which has a tagline for the products similar to what index fund investors are used to hearing: “Stop chasing coins. Start owning the market.” Unlike most spot crypto products, the two new ones are registered as 1940 Act (rather than 1933 Act) products.

As to why investors choose ETFs, per the BlackRock survey:

• Diversification across companies and markets (47%)
• Ease of buying and selling (40%)
• Potential for returns (37%)

In Bitcoin They Trust: This all bodes well for BlackRock, which conveniently, is the world’s dominant asset manager, biggest ETF issuer and operator of the largest crypto ETP, the iShares Bitcoin Trust, which now represents about $80 billion. Only a few weeks ago, that ETF was poised to hit $100 billion in assets, though falling Bitcoin prices and a few days of net outflows have dragged its AUM down by $17 billion. It’s a reminder, especially for those new to investing, that if they like the idea of crypto, they better like volatility.