Bitcoin and Ethereum Expected to Join Model Portfolios by 2025, Says BlackRock Executive
A BlackRock executive, Samara Cohen, predicts that Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) will find their way into model portfolios by the end of this year and extending into 2025. Model portfolios, as defined by financial services firm Morningstar, are diversified investment collections curated by financial advisors.
Cohen, BlackRock’s chief investment officer of ETFs and index investments, shared insights in a recent interview with Bloomberg, highlighting that major wirehouses such as Morgan Stanley, Wells Fargo, and UBS are presently engaged in due diligence and risk analytics assessments for these top two cryptocurrencies.
The executive emphasized the distinct nature of Bitcoin and ETH as asset classes with unique use cases, underscoring the importance of evaluating their role within investment portfolios and their potential as diversifiers. Cohen anticipates that as this evaluation progresses, we will witness actual allocations being made within model portfolios, shedding light on how investors are incorporating these assets into their strategies.
In a significant move, the U.S. Securities and Exchange Commission (SEC) approved the launch of the first spot Bitcoin ETFs in January, marking a pivotal moment for the cryptocurrency market. Following suit, Ethereum ETFs were introduced just last week, further expanding the accessibility of digital assets to investors.
As the landscape of traditional finance intersects with the burgeoning realm of cryptocurrencies, the integration of Bitcoin and Ethereum ETFs into model portfolios signifies a notable shift in how these assets are perceived and utilized within the broader investment landscape. This development not only reflects the growing acceptance and recognition of cryptocurrencies but also underscores their evolving role as legitimate investment options for institutional and retail investors alike.
The approval and subsequent launch of Bitcoin and Ethereum ETFs signal a maturing market environment where digital assets are increasingly viewed as mainstream investment vehicles with the potential to enhance portfolio diversification and overall risk-adjusted returns. This trend towards embracing cryptocurrencies within traditional investment frameworks is expected to continue shaping the financial landscape in the coming years, offering investors new avenues for portfolio optimization and exposure to the evolving digital asset space.
