According to Nicholas Peach, head of APAC iShares at BlackRock, even a small allocation to cryptocurrencies within model portfolios in Asia could trigger enormous capital inflows into the crypto market.
During a panel discussion at Consensus Hong Kong, Peach highlighted how growing institutional acceptance of crypto exchange-traded funds (ETFs), especially across Asia, is transforming market expectations.
“Some financial advisors are now suggesting that 1% of a typical investment portfolio be dedicated to cryptocurrencies,” Peach explained. “If you do the math, considering that household wealth in Asia totals around $108 trillion, allocating just 1% would translate into nearly $2 trillion flowing into the crypto space — which represents about 60% of today’s entire market capitalization.”
This illustration underscores the vast amount of capital currently on the sidelines within traditional finance. Even modest adjustments in asset allocation strategies could significantly influence digital asset markets’ future trajectory despite cautious adoption rates.
BlackRock’s iShares division stands as the largest ETF provider globally and has been instrumental in offering regulated cryptocurrency access to conventional investors. In January 2024, they launched their U.S.-listed spot Bitcoin ETF named IBIT. This fund rapidly became history’s fastest-growing ETF and now manages close to $53 billion in assets.
However, Peach noted that this surge isn’t confined solely to U.S. investors—Asian participants have contributed substantially to inflows into U.S.-listed crypto ETFs. “There has been widespread growth in ETF adoption throughout the region,” he remarked, adding that investors increasingly use ETFs not only for cryptocurrency exposure but also for equities, bonds, and commodities across various sectors.
Markets such as Hong Kong, Japan, and South Korea are actively working towards launching or expanding their own crypto ETF offerings. Industry experts anticipate these regional platforms will gain momentum as regulatory frameworks become clearer.
The upcoming challenge for BlackRock and other asset managers lies in aligning product availability with investor education initiatives and strategic portfolio management approaches.
“The volume of capital accessible through traditional financial channels is extraordinarily large,” said Peach. “It requires only minimal uptake for these investments to generate profoundly impactful financial outcomes.”