During the panel discussion at the Consensus conference in Hong Kong, Pitch noted the enormous capital pools in traditional finance against the backdrop of the increasing use of ETFs across Asia.
Even a modest allocation of a model portfolio to cryptocurrency in Asia could lead to a significant influx of funds into the market, according to Nicholas Pitch, head of APAC iShares at BlackRock.
Speaking on a panel at Consensus Hong Kong, Pech noted that the growing institutional recognition of cryptocurrency exchange-traded funds (ETFs), especially in Asia, is shaping new expectations for the sector.
"Some model consultants now recommend allocating 1% to cryptocurrencies in your standard investment portfolio," Pech said. "If we play around with the numbers a bit... Asia has about 108 trillion dollars of household wealth. If we take 1% of that... it results in just under 2 trillion dollars coming into the market, which is about 60% of the current market volume?"
Pech emphasized this point as a way to characterize the scale of capital that remains on the sidelines, especially in traditional finance. A small change in asset allocation models, he believes, could have a substantial impact on the future of digital assets—even if adoption remains conservative.
The iShares division of BlackRock is the world's largest ETF provider and has played a key role in providing traditional investors access to regulated crypto assets. In January 2024, the company launched a spot Bitcoin ETF registered in the USA. That fund, known as IBIT, became the fastest-growing ETF in history, currently managing assets of nearly 53 billion dollars.
But, according to Pech, the boom is not just a U.S. story. Asian investors make up a significant portion of flows into U.S.-registered crypto-ETFs. "In fact, the region is seeing a boom in broader ETF adoption," he noted, adding that more and more investors are turning to ETFs to express their views across various asset classes—not just cryptocurrencies, but also stocks, bonds, and commodities.
Several markets in Asia, including Hong Kong, Japan, and South Korea, are moving towards launching or expanding crypto-ETF offerings. Industry observers expect increased activity from these regional platforms as regulatory clarity improves.
For BlackRock and other asset managers, the next task is to combine access to products with investor education and portfolio management strategy.
"The volumes of capital available in traditional finance are incredibly large," said Pech. "It does not take a high level of adoption to achieve truly significant financial results."
