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BlackRock CIO Says Financial Advisors Don’t Buy 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, Chief Investment Officer of ETF and Index Investments at BlackRock, provided insights during the conference Coinbase State of Cryptocurrency Summit in New York City.
Why Financial Advisors Avoid Bitcoin ETFs
Cohen explained that about 80% of Bitcoin ETF purchases are currently made by self-directed investors using online brokerage accounts. Second latest quarter 13-F filings, hedge funds and brokerages have also been active buyers. However, registered investment advisors remain hesitant.
Cohen said, “I would call them distrustful… That’s their job.” He emphasized the fiduciary responsibility advisors have to their clients The historical volatility of Bitcoin priceswhich sometimes reached 90%, requires in-depth risk analysis and due diligence.
Financial advisors meticulously evaluate data and risk analysis to determine Bitcoin’s appropriate role investment portfoliosconsidering factors such as risk tolerance and liquidity needs.
“This is a moment, in terms of presenting really important data, risk analysis [and determining] the role Bitcoin can play in a portfolio, what type of allocation is appropriate given an investor’s risk tolerance, their liquidity needs. That’s what a consultant should do, so I think this journey that we’re on is exactly the right one and they’re doing their job,” Cohen added.
To know more: How to Trade a Bitcoin ETF: A Step-by-Step Approach
Historical Bitcoin ETF stocks. Source: CryptoQuant
While financial advisors remain cautious, some analysts maintain a cautious stance bullish 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. The new forecast suggests a $200,000 high cycle by 2025. This prediction is driven by unprecedented demand from spot ETFs and 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 contributed by ETFs combined. We expect Bitcoin ETFs to be equivalent to approximately 7% of Bitcoin in circulation by 2025 and nearly 15% of Bitcoin supply by 2033,” Bernstein analysts wrote.
To know more: Bitcoin (BTC) Price Prediction 2024/2025/2030
Also WAX co-founder William Quigley commented on the proliferation of ETFs for other cryptocurrencies such as Solana. “Wall Street is greedy,” Quigley said, suggesting that the success of Bitcoin ETFs will spur similar products.
However, he warned that if momentum slows, ETF providers may shift focus or close underperforming ETFs due to lack of demand.
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