Does BlackRock Prefer Ethereum Over Bitcoin?

2025-07-21

Over the past week, Ethereum’s price has surged significantly, sparking discussions about institutional investors shifting their strategies. One key player, BlackRock, appears to be favouring Ethereum over Bitcoin.

This article examines whether BlackRock truly prefers Ethereum, what their actions mean for the crypto market, and potential cautionary points for retail investors. It is important to remember that this coin’s long-term trajectory remains unclear, and even its official whitepaper is currently inaccessible on its website.

BlackRock’s Recent Ethereum Purchases

BlackRock, the world’s largest asset manager, has been increasing its Ethereum holdings. Recent data reveals that the firm purchased approximately $547 million worth of ETH, surpassing its Bitcoin investment of around $497 million.

This suggests that BlackRock is allocating a larger proportion of funds into Ethereum, even after adjusting for the market capitalisation differences between the two assets.

This purchase coincides with a proposal by Nasdaq to allow staking in BlackRock’s Ethereum ETF, a move indicating confidence in Ethereum’s staking mechanisms and long-term viability. However, it is worth noting that BlackRock’s approach does not necessarily equate to a blanket preference for Ethereum over Bitcoin.

Instead, it might reflect a diversification strategy to manage institutional risks and capture yield opportunities from ETH staking.

Arkham Intelligence reported that since early July, BlackRock’s Ethereum holdings rose from $156 million to over $547 million. In contrast, their Bitcoin holdings grew more moderately from $125 million to $497 million.

While this difference appears significant, it could be driven by recent market conditions, including Ethereum’s 45% weekly rally, rather than a definitive strategic shift.

For retail investors observing these institutional moves, it is critical to remember that such purchases are based on complex portfolio considerations. They may not directly translate to simple buy signals for individual traders, especially given Ethereum’s current overheated market state.

Institutional Accumulation and Market Reactions

Ethereum’s price movement has not gone unnoticed by market analysts. Michaël van de Poppe recently warned of a potential short-term pullback after Ethereum jumped from below $2,600 to a local peak of $3,674. His technical analysis highlighted an 11.7% correction possibility, with the price potentially retracing to the $3,150–$3,200 zone.

According to van de Poppe, the rally has left the market in an overheated state. Indicators like the Relative Strength Index (RSI) show Ethereum is in overbought territory, especially on daily charts. This raises the risk of a correction to stabilise momentum before any further upward movement.

Meanwhile, other institutions have mirrored BlackRock’s approach. Companies such as SharpLink Gaming and Bitmine Technologies increased their ETH exposure in recent weeks. Ethereum ETFs also saw net inflows of over $1.3 billion across the last two trading sessions, signalling renewed interest from broader institutional corridors.

However, it is vital to interpret these moves with caution. Institutional purchases do not guarantee price appreciation, especially in the short term. There remains a gap in structural support below current levels, which could result in price retracements to rebalance market demand.

Investors should also note that Ethereum’s long-term fundamentals, while strong in terms of staking and infrastructure upgrades, are not without risks. The inaccessibility of the whitepaper on its official website at present adds an additional layer of uncertainty when evaluating its core documentation and transparency.

Could Ethereum Outperform Bitcoin?

One intriguing point from van de Poppe’s analysis is the ETH/BTC ratio rebound. Historically, this ratio is used to assess Ethereum’s performance relative to Bitcoin. The recent bounce off a key support level, last seen in 2020, has led some analysts to speculate about a new rotation period where Ethereum might outperform Bitcoin in the coming months.

This hypothesis is further supported by Ethereum’s staking mechanisms, its upcoming network upgrades, and the institutional inflows discussed above. Moreover, BlackRock’s ETH purchases align with the firm’s broader interest in yield-bearing assets, positioning ETH as an attractive option due to its staking rewards compared to Bitcoin’s fixed supply structure.

However, it is important to balance these potential upsides with market realities. Despite institutional optimism, Ethereum’s price structure suggests that the current rally may be temporary. Van de Poppe highlighted that the move from $2,400 to above $3,600 left a structural gap with minimal support, raising the likelihood of a retracement to consolidate market momentum.

Furthermore, Fridays and Saturdays historically witness corrective phases after steep rallies, implying that price volatility could increase towards the end of the week. Investors should remain vigilant, as entering positions at overbought levels may expose them to short-term liquidations if the market reverses.

In this context, while institutional accumulation often strengthens market confidence, it does not eliminate inherent risks. Ethereum’s future performance remains uncertain, and market conditions can shift rapidly, affecting even the most informed strategies.

Conclusion

BlackRock’s increasing Ethereum purchases have raised questions about whether the asset manager prefers ETH over Bitcoin. While data shows BlackRock has allocated more funds to Ethereum recently, it is premature to conclude this as a permanent strategic shift. The market remains overheated, and analysts warn of potential corrections.

As with any cryptocurrency investment, caution is essential. Ethereum’s long-term trajectory is still unclear, and even its whitepaper is currently inaccessible. Investors should conduct their own due diligence and remain aware of the volatile nature of crypto assets.