Shortly after the launch of BlackRock's bitcoin exchange-traded fund (ETF), CEO Larry Fink of the asset manager essentially launched the marketing campaign for an Ethereum-based second spot ETF product, highlighting the blockchain's revolutionary potential.

Promoting more cryptocurrency exchange-traded funds (ETFs) makes sense since the Wall Street machine has to be fed, especially in light of the attention that the bitcoin (BTC) product has received. Thousands of salespeople will essentially be holding meetings, showcasing new products, explaining what they do, and asking potential customers whether they would want to purchase them.

But issuers may find themselves in an intriguing dilemma if they decide to market an ether (ETH) ETF. It's possible that investors already purchased a bitcoin ETF, so the practical necessity to add some flair to portfolios has already been met. Why would they require an additional cryptocurrency diversification tool?

The CEO of CF Benchmarks, an index provider for digital assets and a partner firm on the BlackRock iShares bitcoin ETF (IBIT), Sui Chung, has been considering it, particularly after he recently released a cheat sheet outlining the advantages of an investment in a bitcoin-backed security.

The explanation includes definitions of bitcoin technology and how it might be used in finance, but according to Chung, that is not as important as the bitcoin ETF's investment function, which is to diversify a portfolio and increase the overall risk-adjusted return with a tiny allocation.

In an interview, Chung stated, "The most important thing is how bitcoin behaves and its price history." In an investment portfolio consisting of stocks, bonds, and cash, bitcoin is the most powerful diversifier ever discovered. When you add a little, the Sharpe ratio doubles.

It gets incredibly intriguing to see how a major financial firm, like Fidelity, BlackRock, or Franklin Templeton, promotes an ETH ETF to the average TradFi investor. stated Chung. "Because someone has already added 1.5% or 2% of bitcoin to their portfolio; you've already sold bitcoin by choosing the diversification route."

In a way, BlackRock CEO Fink has already begun dipping his toes into the murky waters of Ethereum by bringing up tokenization, a notion that TradFi businesses hold dear and that the majority of ETF issuers probably fully support. However, according to Chung, such an educational endeavor should also cover smart contracts and decentralized finance (DeFi), in addition to the SEC's viewpoint on blockchain staking and its can of worms.

Naturally, one of the main distinctions between Ethereum and Bitcoin is the latter's transition from an energy-intensive proof-of-work security scheme to a more environmentally friendly validator model.

ESG—environmental, social, and governance—isn't going to be sold that way, according to Chung. "Considering all the controversies surrounding ESG investment today, are you really still interested in going there? Most likely not.

BlackRock said that she would not comment.