Blackrock's head of ETF and Index Investments discussed the cautious approach financial advisors are taking towards spot bitcoin ETFs due to price volatility and regulatory concerns. The executive emphasized that advisors are focused on constructing portfolios, conducting risk analysis, and due diligence to best serve their clients.
During Coinbase's State of Crypto Summit, Samara Cohen, Blackrock's chief investment officer, highlighted the careful yet diligent stance financial advisors are adopting towards spot bitcoin ETFs. The Ishares Bitcoin Trust (IBIT), Blackrock's own spot bitcoin ETF, was one of the 10 funds approved by the SEC earlier this year.
Cohen recognized that while 80% of bitcoin ETF purchases are made by self-directed investors, financial advisors are proceeding with caution due to bitcoin's history of extreme price swings and regulatory uncertainties. She emphasized the importance of advisors acting as fiduciaries, ensuring thorough risk analysis and due diligence to create portfolios that match clients' risk tolerance and liquidity requirements. Cohen stated, "This is a moment for presenting crucial data, risk analytics, and the potential role of bitcoin in a portfolio. Advisors are tasked with determining the appropriate allocation based on an investor's risk tolerance and liquidity needs."
The executive noted that bitcoin ETFs serve as a link between cryptocurrency and traditional finance, offering a more accessible entry point for investors interested in bitcoin while managing risks across different financial systems.
In a previous statement, Ric Edelman, founder of Edelman Financial Services, revealed that 77% of financial advisors are eagerly awaiting the launch of spot bitcoin ETFs to offer them to clients, as compliance departments are likely to approve these products like other thematic ETFs.
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