News
Financial Advisors Still Evaluating Spot Bitcoin ETFs: BlackRock CIO
Share this article
Despite the SEC’s historic approval of spot Bitcoin ETFs in January, most financial advisors are still trying to figure out how these new instruments will fit into their clients’ portfolios, according to Samara Cohen, Chief Investment Officer of ETF and Index Investments at BlackRock.
Cohen said currently the main buyers of spot Bitcoin ETFs are “self-directed investors” who manage their investments through online brokerage accounts. Institutional investors such as hedge funds and brokerages are also participating, but registered investment advisors (RIAs) are adopting cautiously.
The point is Bitcoin’s historical price volatility, its lack of a long-term track record and customers’ risk tolerance, Cohen noted. As RIAs, their role is to be especially diligent in risk assessment and portfolio construction, which includes understanding and evaluating new asset classes like Bitcoin.
“This is a moment, in terms of presenting really important data, risk analysis [and determining] the role [Bitcoin] can play into a portfolio, what type of allocation is appropriate given an investor’s risk tolerance, their liquidity needs,” She said Cohen at Coinbase’s State of Crypto Summit this week.
“This is what a consultant should do, so I think this journey that we are on is exactly the right one and they are doing their job,” he added.
For investors willing to invest in Bitcoin without having to manage risks in two different ecosystems, Spot Bitcoin ETF they are a bridge between cryptocurrencies and traditional finance, according to Cohen. There were no good on-ramps into cryptocurrencies before ETFs, he said.
Based on last quarter’s 13F data, US spot Bitcoin ETFs attracted 937 professional firms in the first quarter of 2024. Major institutions holding shares of Bitcoin ETF include Millennium Management, Morgan Stanley, JPMorgan, UBS, Wells Fargo, and the State of Wisconsin Investment Board, to name a few.
Bitcoin adoption could be the key to retaining future customers
Financial advisors with a traditional, conservative client base remain hesitant or even avoid recommending Bitcoin ETFs to their clients.
Neither the firm nor its clients asked for these ETFs, says Brian Sokolowski, founder and principal of Bluebird Wealth Management in Medfield, Massachusetts. According to him, his company’s clients are mostly seniors in their 50s and 60s who are approaching retirement.
“Some of our younger clients proactively ask about cryptocurrency exposure, but for our core clientele it is not a high priority.” She said Sokolowski.
However, the trend may change over time as younger generations influence the acceptance of Bitcoin and financial institutions recognize its potential to attract future customers. Intergenerational wealth transfer is one factor that could lead to broader adoption of Bitcoin among older individuals.
Steve Cohen, the billionaire founder of the hedge fund Point72 Asset Management, said this an interview with CNBC in April that he owned a small portion of Bitcoin because of his son.
Bitcoin adoption is underway, but it’s “a slow journey,” according to Coinbase Chief Financial Officer Alesia Haas.
Share this article
The information on or accessed through this website is obtained from independent sources that we believe to be accurate and reliable, but Decentral Media, Inc. makes no representations or warranties as to the timeliness, completeness, or accuracy of any information on or accessed via this website. . Decentral Media, Inc. is not an investment advisor. We do not provide personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become obsolete or may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
Crypto Briefing can enrich articles with AI-generated content created by Crypto Briefing’s proprietary AI platform. We use AI as a tool to provide fast, valuable and actionable insights without losing the insight and oversight of native cryptocurrency experts. All AI-augmented content is carefully reviewed, including for factual accuracy, by our editors and writers, and we always draw from multiple primary and secondary sources, when available, to create our stories and articles.
You should never make an investment decision about an ICO, IEO or other investment based on the information on this website and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult with a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analysis or reporting on ICOs, IEOs, cryptocurrency, currency, tokenized sales, securities or commodities.