ETFs
BlackRock CIO Says Financial Advisors Aren’t Buying Bitcoin ETFs
The launch of Bitcoin exchange-traded funds (ETFs) in January marked a significant milestone. However, financial advisors are approaching these new investment vehicles with caution.
Samara Cohen, BlackRock’s chief investment officer for ETF and index investing, provided insights during the Coinbase State of Crypto Summit At New York.
Why Financial Advisors Avoid Bitcoin ETFs
Cohen explain that approximately 80% of Bitcoin ETFs purchases are currently made by self-directed investors using online brokerage accounts. According to 13-F filings from the last quarter, hedge funds and brokerages have also been active buyers. However, registered investment advisors remain hesitant.
Cohen said: “I would call them suspicious…That’s their job. » She emphasized the fiduciary responsibility of advisors to their clients, emphasizing that Historical Bitcoin Price Volatilitywhich sometimes reaches 90%, requires in-depth risk analysis and due diligence.
Financial advisors meticulously evaluate data and risk analyzes to determine the appropriate role of Bitcoin in investment portfoliostaking into account factors such as risk tolerance and liquidity needs.
“This is the time to really highlight important data and risk analyses. [and determining] the role Bitcoin can play in a portfolio, what type of allocation is appropriate given an investor’s risk tolerance and liquidity needs. That’s what an advisor is supposed to do, so I think the journey we’re taking is exactly the right one and they’re doing their job,” Cohen added.
Learn more: How to Trade a Bitcoin ETF: A Step-by-Step Approach
Historical holdings of Bitcoin ETFs. Source: CryptoQuant
Even if financial advisors remain cautious, some analysts believe optimistic outlook on the future of Bitcoin.
Bernstein, a major asset manager with $725 billion in assets, predicts that the price of Bitcoin could reach $1 million by 2033. New forecasts suggest a cycle high of $200,000 by 2025 This forecast is driven by unprecedented demand for spot ETFs and the limited supply of Bitcoin. .
Bernstein’s previous estimate was $150,000 for 2025, reflecting their growing optimism about Bitcoin’s potential.
“Approximately $15 billion in net new flows were generated by the ETFs combined. We expect Bitcoin ETFs to account for approximately 7% of Bitcoin in circulation by 2025 and nearly 15% of Bitcoin supply by 2033,” Bernstein analysts wrote.
Learn more: Bitcoin (BTC) Price Prediction 2024/2025/2030
WAX co-founder William Quigley commented on the proliferation of ETFs for other cryptocurrencies like Solana. “Wall Street is greedy,” Quigley said, suggesting that the success of Bitcoin ETFs will boost similar products.
He warned, however, that if momentum slows, ETF providers could change focus or close underperforming ETFs due to a lack of demand.
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