According to reports, Samara Cohen of BlackRock has stated that registered investment advisors have been hesitant to embrace spot Bitcoin (BTC) exchange-traded funds (ETFs). Cohen, who holds the position of BlackRock’s CIO of ETF and index investments, suggests that approximately 80% of Bitcoin ETF investments come from self-directed investors, as CNBC reports. Additionally, she mentions that hedge funds and brokerages have been increasing their holdings of Bitcoin ETF shares. However, Cohen points out that there is one group of investors who have yet to fully embrace this investment vehicle.
Describing them as cautious, Cohen explains, “That’s their job… An investment advisor is a fiduciary to their clients. This asset class has experienced significant price volatility in the past, and their role is to carefully construct portfolios, conduct risk analysis, and due diligence. They are currently fulfilling these responsibilities.” Cohen believes that registered investment advisors (RIAs) are still in the early stages of adopting Bitcoin ETFs.
She emphasizes that this is a crucial moment for providing essential data, risk analytics, and determining the role Bitcoin can play in a portfolio. Advisors need to assess the appropriate allocation for each investor based on their risk tolerance and liquidity requirements. Cohen sees this as a necessary journey that advisors must undertake to fulfill their duties effectively.
In a prediction made in April, Mark Yusko of Morgan Creek suggested that investment advisors may potentially allocate around 1% of the funds managed for the baby boomer generation to spot Bitcoin ETFs in the coming months. With baby boomers having approximately $30 trillion under the guidance of financial advisors, Yusko believes that this could result in $300 billion flowing into the Bitcoin space, surpassing the total amount converted to Bitcoin over the past 15 years.
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