Samara Cohen, BlackRock’s chief investment officer of ETF and Index Investments, recently addressed the cautious approach financial advisors are taking toward spot bitcoin exchange-traded funds (ETFs) during Coinbase’s State of Crypto Summit. Cohen emphasized that while self-directed investors account for 80% of bitcoin ETF purchases, financial advisors remain wary due to the cryptocurrency’s history of significant price volatility and regulatory concerns.
Cohen noted that advisors, acting as fiduciaries, must perform comprehensive risk analysis and due diligence to construct portfolios that align with their clients’ risk tolerance and liquidity requirements. “Their job is really to construct portfolios and do the risk analysis and due diligence,” Cohen said, adding, “They’re doing that right now.”
She further elaborated on the responsibilities of financial advisors, stating, “This is an asset class that has had 90% price volatility at times in history, and their job is really to construct portfolios and do the risk analysis and due diligence.” Cohen praised the current approach, noting, “This is a moment, in terms of really putting forward important data, risk analytics, the role bitcoin can play in a portfolio, what sort of allocation is appropriate given an investor’s risk tolerance, their liquidity needs.”
Highlighting the potential of bitcoin ETFs, Cohen described them as a bridge between the crypto world and traditional finance, offering a more accessible entry point for investors interested in bitcoin without needing to manage risks across different ecosystems.
Additionally, Ric Edelman, founder of Edelman Financial Services, previously pointed out that a survey indicated 77% of financial advisors are waiting for the availability of a spot bitcoin ETF. This would allow them to offer bitcoin to their clients with the confidence that compliance departments would approve the product as they would any other thematic ETF.
