BlackRock exec says that advisors are cautious about bitcoin ETFs and are adopting them slowly.

• Bitcoin exchange-traded funds (ETFs) were introduced in January, but financial advisors have been hesitant to embrace them.
• Bitcoin's volatile prices and short track record are the main concerns of financial advisors regarding it.
• According to Samara Cohen, BlackRock's chief investment officer of ETF and index investments, Bitcoin ETFs can serve as a connection between the worlds of cryptocurrency and traditional finance.

BlackRock's Samara Cohen reports that financial advisors are slowly adopting exchange traded funds, which launched in January.

Self-directed investors have been the primary drivers of bitcoin ETF purchases, with the iShares Bitcoin Trust (IBIT) being one of the funds to launch this year, according to a speaker at the Coinbase State of Crypto Summit in New York City on Thursday.

BlackRock's ETF and index investments chief investment officer, Cohen, stated that hedge funds and brokerages have also been buyers, as per last quarter's 13-F filings. However, registered investment advisors have been more cautious.

CNBC surveyed its Advisor Council on the reasons behind their caution towards new cryptocurrency products, which are a regulated and well-known investment option for a new asset class that has gained popularity recently. Responses varied from concerns about bitcoin's price volatility to the flagship cryptocurrency being too new to have a solid track record. Regulatory compliance and the crypto's history of fraud and scandal were also major concerns among advisors.

Cohen stated that the financial advisors were wary, as it is their job to be skeptical.

"A fiduciary to their clients, an investment advisor constructs portfolios and performs risk analysis and due diligence. Their job involves managing an asset class that has had 90% price volatility at times in history. They are currently doing this."

"This moment is crucial for presenting significant data on risk analytics and determining the role of bitcoin in a portfolio, as well as determining the appropriate allocation based on an investor's risk tolerance and liquidity needs. As an advisor, it is their responsibility to guide investors through this journey, and I believe they are doing their job effectively."

Cohen believes that bitcoin ETFs serve as a link between the crypto and traditional finance worlds, especially for investors looking to invest in bitcoin without managing risk across two separate ecosystems. Prior to the ETFs, the available onramps into crypto were inadequate for what some investors desired.

The adoption of bitcoin is progressing gradually, as stated by Coinbase chief financial officer Alesia Haas, a sentiment shared among conference speakers.

T. Rowe Price's digital assets strategy head, Blue Macellari, stated that some investors consider a 1% allocation to be a safe and comfortable amount. She emphasized that portfolio allocations into bitcoin should be viewed as binary events, either greater than 1% or zero, while acknowledging a cautious approach to adoption.

"Getting comfortable requires a psychological shift and takes time, according to Macellari."