BlackRock Says Model Portfolio Will Start Buying Crypto ETFs In 2024

BlackRock’s Chief Investment Officer for exchange-traded funds and Index Investments, Samara Cohen, believes that crypto ETFs will soon be allocated to “model portfolios.” 

While speaking in an interview with Bloomberg, Cohen stated that some of the largest financial institutions on Wall Street were planning to allocate some of their investments to BTC. 

Cohen was responding to a query on whether Wall Street giants like Morgan Stanley, Wells Fargo, and UBS would onboard and promote ETFs tracking digital assets. 

Model Portfolios Could Allocate Portfolio To Crypto ETFs 

According to Cohen, these financial behemoths were currently conducting risk analysis on Bitcoin to determine the role that this digital asset, with a $1.3 trillion market cap, will serve. 

Cohen describes these firms as “model portfolios” saying that they will likely start dipping their toes into the digital asset industry later this year. 

“What will happen toward the end of this year and into next year is we will see allocations into model portfolios which will give us much more of a steer into how investors are using them,” Cohen stated. 

Model portfolios include the investments provided by large brokerage firms. These portfolios are usually diversified to prioritize the balance of risk and return depending on the transparency strategy adopted. 

The $10 trillion asset manager anticipates that model portfolios under management to increase from $4.2 trillion to $10 trillion over the next five years. 

No More Crypto ETFs… For Now 

Cohen went further to discuss other crypto ETFs aside from Bitcoin. She noted that spot Ether ETFs, which launched recently, are different from spot Bitcoin ETFs. 

Cohen believes that Bitcoin and Ether are different asset classes, with each one having its use case. However, these assets served a crucial role of being “portfolio diversifiers.” 

She also pointed out that the approval and launch of other crypto ETFs would likely not launch soon. 

“We really look at the investability to see what meets the criteria, what meets the bar to be delivered in an ETF, and for us, right now both between investability and considerations, and also what we hear from our clients, you know, Bitcoin and ETH definitely meet that bar,” she stated. 

Cohen believes that it would take time before another crypto ETF launches in the US. asset managers like VanEck and 21Shares have already filed for spot Solana ETFs. 

During the Bitcoin 2024 Conference held in Nashville last week, BlackRock’s head of digital assets, Robert Mitchnick echoed a similar sentiment. He stated that there was less likelihood that a long list of crypto ETFs would launch in the US.