BlackRock Clients Ditch Bitcoin for Ethereum Amid Institutional Rotation

BlackRock's clients have been selling Bitcoin ETF shares and buying Ethereum products in what appears to be an institutional rotation between the two leading cryptocurrencies.

A recent report from Arkham Intelligence found that BlackRock's clients net sold $60 million in Bitcoin ETF shares, while investing $20 million in Ethereum products. This shift has sparked concerns about a possible rotation into ETH.

According to data from SoSoValue, BlackRock's iShares Bitcoin Trust (IBIT) experienced net outflows of around $8.8 million on July 27 and $54.8 million on July 28, resulting in a cumulative figure close to the $60 million cited by Arkham for the early part of the week.

On the other hand, BlackRock's Ethereum products, primarily the iShares Ethereum Trust (ETHA) and its staking-oriented counterpart, posted positive activity. ETHA attracted about $11.75 million in net inflows on July 27 alone, helping the broader U.S. spot Ethereum ETF complex record roughly $9.2-9.3 million in net gains that day.

The current flow divergence does not erase Bitcoin's overwhelming share of the portfolio. It highlights that client capital can shift between the two assets within the same issuer's product suite with relative ease. The net effect this week, per Arkham, has been a modest reduction in Bitcoin exposure paired with an increase in Ethereum exposure among BlackRock's ETF clients.