Even a modest model portfolio allocation to crypto in Asia could generate massive inflows into the market, according to Nicholas Peach, head of APAC iShares at BlackRock.
Speaking on a panel at Consensus Hong Kong, Peach said the growing institutional acceptance of crypto exchange-traded funds (ETFs) – particularly in Asia – is reshaping industry expectations.
“Some model advisors now recommend a 1% allocation to cryptocurrencies in your standard investment portfolio,” Peach said. “If you do some fun math… there’s about $108 trillion in household wealth across all of Asia. So you take 1% of that… and that would be just south of $2 trillion in market entries, which is what, 60% of what the market is right now?”
Peach highlighted this point as a way to define the extent of capital being left behind, particularly in traditional finance. According to him, a slight change in asset allocation models could have an outsized impact on the future of digital assets, even if their adoption remains conservative.
BlackRock’s iShares unit is the world’s largest ETF provider and has played a central role in providing regulated access to cryptocurrencies for traditional investors. The company launched its U.S.-listed spot Bitcoin ETF in January 2024. This fund, known as IBIT, has become the fastest-growing ETF in history, now with nearly $53 billion in assets under management.
But according to Peach, the boom isn’t just an American story. Asian investors account for a significant portion of flows into US-listed crypto ETFs. “There has actually been a boom in adoption of ETFs more broadly in the region,” he said, noting that more investors are turning to ETFs to express their opinions across asset classes – not just cryptocurrencies, but also stocks, fixed income and commodities.
Several markets in Asia, including Hong Kong, Japan and South Korea, are moving toward launching or expanding crypto ETF offerings. Industry observers expect these regional platforms to grow stronger as regulation improves.
For BlackRock and other asset managers, the next challenge is matching product access with investor education and portfolio strategy.
“The pools of capital available in traditional finance are incredibly vast,” Peach said. “It doesn’t take a lot in terms of adoption to drive really meaningful financial results. »
