ETFs
BlackRock Executive Says Investment Advisors Remain Wary of Bitcoin ETFs ⋆ ZyCrypto
BlackRock’s chief investment officer for ETF and Index Investments says registered investment advisors remain “wary” of spot Bitcoin exchange-traded funds (ETFs).
Speaking to CNBC, Cohen note that “self-directed investors” account for about 80% of Bitcoin ETF purchases. Self-directed investors do not rely on financial advisors and investment managers to manage their portfolios.
Investment Advisors Hesitant to Adopt Bitcoin ETFs
According to Cohen, investment advisors are skeptical about The Potential of Bitcoin ETFs. These companies have a fiduciary duty to their customers, who expect returns on their investment. Guaranteeing returns from Bitcoin ETFs is challenging, given the volatility of the asset’s price.
“This is an asset class whose prices have seen 90% volatility at certain points in history, and their job is really to build portfolios, do the risk analysis and exercise due diligence. They’re doing it right now.
Cohen’s remarks come as US spot Bitcoin ETFs saw four days of outflows last week. As of June 14, outflows from these ETFs totaled $189 million. BlackRock’s iShares Bitcoin Trust ETF (IBIT) was the only product to see inflows on Friday. However, according to Farside data, IBIT’s revenues remained low, at just $1.5 million.
The weakening demand follows the drop in Bitcoin prices. Last week, the price of Bitcoin fell drastically, from around $70,000 on June 10 to below $67,000. BTC was trading at $66,635 on June 16 at 11:47 a.m. EST.
Skeptical New JPMorgan Investors Invest in Bitcoin ETFs
As Wall Street investment advisors shun Bitcoin ETFs, JPMorgan has said Entries into these products since their launch are likely attributed to seasoned crypto investors.
The major U.S. bank estimated that most of the $16 billion in inflows into spot Bitcoin ETFs over five months of trading did not come from new funds entering the crypto space. Instead, funds allocated to ETFs came from digital wallets held on exchanges.
According to JPMorgan, the rotation of funds from exchanges to Bitcoin ETFs has led to a decline in Bitcoin exchange reserves. Bitcoin exchange reserves recently reached a record levelwith around 220,000 BTC leaving exchanges since the launch of spot Bitcoin ETFs.
Nonetheless, institutional demand for Bitcoin ETFs was seen in the first quarter. 13F filings made by major financial institutions with the United States Securities and Exchange Commission (SEC) revealed that institutions such as Millenium Management, JPMorgan Chase, Susquehanna International Group, Elliot Capital and the State of Wisconsin have allocated part of their investment portfolios in Bitcoin ETFs.