BlackRock CIO Says Financial Advisors Are Not Buying Bitcoin ETFs

The launch of Bitcoin Exchange Traded Funds (ETFs) in January was a milestone. However, financial advisors are approaching these new investment vehicles with caution.

Samara Cohen, BlackRock's head of ETF and index investments, gave insights during the Coinbase State of Crypto Summit in New York City.

Why Financial Advisors Stop Bitcoin ETFs

Cohen explained that 80% of Bitcoin ETF purchases are made by self-directed investors using online brokerage accounts. According to 13-F filings last quarter, hedge funds and brokerages were active buyers. However, registered investment advisors still don't hesitate.

“I call them careful … it's their job,” Cohen said. She emphasized the fiduciary responsibility of advisors to their clients, noting that Bitcoin's historical price volatility, which has sometimes reached 90%, requires a thorough analysis of risk and due diligence.

Financial advisors carefully review data and risk analysis to determine Bitcoin's appropriate role in investment portfolios, taking into account factors such as risk tolerance and discretionary needs.

“This is the moment, in advance of really important information, risk analysis [and determining] The role Bitcoin can play in a portfolio, an investor's risk tolerance, and what allocation is appropriate for their interest rate. That's what a consultant is supposed to do, so I think the journey we're on now is the right one and they're doing their job,” Cohen added.

Read more: How to trade Bitcoin ETF: A step-by-step approach

While financial advisors are cautious, some analysts are optimistic about Bitcoin's future.

Bernstein, a major asset manager with $725 billion in assets, predicts that Bitcoin's value could reach $1 million by 2033. The new forecast suggests a $200,000 cycle increase by 2025. This forecast is driven by unprecedented demand for spot ETFs and Bitcoin's limited supply. .

Bernstein's previous estimate was $150,000 for 2025, reflecting his growing optimism about Bitcoin's potential.

“Nearly $15 billion in net new inflows came through ETFs combined. We expect Bitcoin ETFs to equal approximately 7% of Bitcoin distribution by 2025 and approximately 15% of Bitcoin supply by 2033,” Bernstein analysts wrote.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

WAX co-founder William Quigley commented on the proliferation of ETFs for other cryptocurrencies such as Solana. “Wall Street is greedy,” says Quigley, suggesting that the success of Bitcoin ETFs will encourage similar products.

But he warned that if momentum slows, ETF providers may shift focus or close underperforming ETFs due to lack of interest.