Blackrock's Chief Investment Officer for ETF and index investments, Samara Cohen, said that financial advisers are gradually adopting Bitcoin funds to allocate assets.
The long-awaited Bitcoin exchange-traded fund (ETF) was launched in January this year. Samara Cohen, chief investment officer for ETF and index investments at BlackRock, said that financial advisers are gradually using these funds to allocate assets.
Speaking at the Coinbase State of Crypto Summit in New York on Thursday, Cohen said: "Currently, about 80% of Bitcoin ETF purchases may come from 'self-directed investors,' who usually allocate through online brokerage accounts." The iShares Bitcoin Trust Fund (IBIT) was one of the first series of funds to debut earlier this year.
Cohen pointed out that hedge funds and brokerages are also buyers, but registered investment advisers are more cautious.
"I would call them cautious...that's their job," Cohen said of financial advisers who are skeptical. She added, "investment advisers are fiduciaries for their clients, and historically, the price volatility of assets like (Bitcoin) has been as high as 90%, and investment adviser's job is to build portfolios, do risk analysis and due diligence. That's exactly what they're doing right now."
"I would call them cautious...that's their job," Cohen said of financial advisers who are skeptical.
"Investment advisers are fiduciaries for their clients, and historically, the price volatility of assets like (Bitcoin) has been as high as 90%, and investment adviser's job is to build portfolios, do risk analysis and due diligence. That's exactly what they're doing right now," she added.
"As far as really presenting important data, risk analysis [and determining] the role of Bitcoin in a portfolio, it is a moment to think about what type of allocation is appropriate based on investor risk tolerance and liquidity needs," she said. "That's what advisers should be doing, so I think we're on the right path right now, and they're doing their job."
Cohen said she views Bitcoin ETFs as a bridge between cryptocurrencies and traditional finance, especially for investors interested in allocating to Bitcoin without managing risks in two different ecosystems. She said existing crypto channels were inadequate to meet the needs of some investors prior to ETFs.
Alesia Haas, Chief Financial Officer of Coinbase, said that Bitcoin is "in the slow adoption phase," which is a theme of the conference.
Blue Macellari, Head of Digital Asset Strategies at T.RowePrice, said that some investors think a 1% allocation is safe and comfortable. She said that the inclusion of Bitcoin in a portfolio is a binary event and should be greater than 1% or equal to zero, but she also acknowledged caution in adoption of Bitcoin.
"There is a psychological factor of needing to try and adapt to it when it comes to Bitcoin right now. It's a paradigm shift...people need time to adjust," Macellari said.