BlackRock executive says advisers are “wary” of Bitcoin ETFs, adoption slow | Wilnesh News

long awaited Bitcoin Exchange-traded funds launched in January and financial advisers are gradually adopting them, said BlackRock’s Samara Cohen.

She said at the meeting that about 80% of current Bitcoin ETF purchases may come from “self-directed investors, who often conduct their own allocations through online brokerage accounts.” Coinbase State of Crypto Summit Thursday in New York City. The iShares Bitcoin Trust (IBIT) is one of the funds launched earlier this year.

Cohen, BlackRock’s chief investment officer for ETF and index investing, noted that hedge funds and brokerages were also buyers, according to last quarter’s 13-F filings, but registered investment advisors were more “cautious.”

CNBC recently surveyed its advisory board, asking them and their colleagues why they were so cautious about these new products, which represent a new, regulated and familiar asset class investment product that has generated significant interest in recent years. . Reactions range from Bitcoin’s infamous price swings to the flagship cryptocurrency being too nascent to establish significant records. Regulatory compliance and cryptocurrencies’ reputation for scams and scandals are also concerns for advisors.

“I would say they’re cautious … that’s their job,” Cohen said of skeptical financial advisers.

“Investment advisors are fiduciaries to their clients,” she added. “This is an asset class that historically has seen sometimes 90% price swings, and their job is really to build the portfolio and do risk analysis and due diligence. They’re doing that now.”

She added: “This is a moment to really bring out important data, risk analysis (and identify) the role that Bitcoin can play in a portfolio, appropriate allocations given investors’ risk tolerance and liquidity needs.” That’s what advisors are supposed to do, so I think we’re on the right journey and they’re doing their job.”

Cohen said she sees Bitcoin ETFs as a bridge between cryptocurrencies and traditional finance, especially for investors who might be interested in allocating money to Bitcoin without having to manage risk in two different ecosystems. She said that prior to the advent of ETFs, existing cryptocurrency on-ramps were insufficient to meet the needs of some investors.

Coinbase Chief Financial Officer Alesia Haas said Bitcoin “is in the process of slow adoption” – a theme that was echoed at the conference.

Blue Macellari, head of digital asset strategy at T. Rowe Price, pointed out that some investors consider a 1% allocation to be a safe and comfortable amount. She stated that she considers portfolio allocations to Bitcoin to be binary events and that they should be greater than 1% or zero, but she also admitted to being cautious about adoption.

“Psychologically, people need to test the waters and adapt,” Marcelari said. “It’s a paradigm shift…it’s going to take time for people to ease into it.”