BlackRock exec Samara Cohen thinks Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) will be allocated to model portfolios by the end of this year and into 2025.

Model portfolios are a basket of different investments crafted by a financial advisor, according to the financial services firm Morningstar.

BlackRock executive thinks Bitcoin, Ethereum ETFs to be allocated to model portfolios by year-end

Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) will likely be allocated to model portfolios by the end of 2023 and into 2025, according to BlackRock executive Samara Cohen.

Model portfolios are a basket of different investments crafted by a financial advisor, according to the financial services firm Morningstar. They are designed to meet the specific needs and goals of each client.

Cohen, who serves as BlackRock’s chief investment officer of ETFs and index investments, said in a new interview with Bloomberg that large wirehouses like Morgan Stanley, Wells Fargo and UBS are currently conducting due diligence and examining risk analytics for BTC and ETH.

“They look at them very differently of course, because as we know, Bitcoin and ETH are two very different asset classes with different use cases. But [they are] looking at their role in the portfolio and particularly their utility as portfolio diversifiers, and I think what will then happen towards the end of this year and into next year is we will see allocations made in model portfolios, which will give us much more of a steer as to how investors are using them.”

According to Cohen, financial advisors are also interested in learning more about the tax implications of including crypto assets in client portfolios and how to integrate them into existing investment strategies.

“Advisers are really interested in understanding the tax implications of including digital assets in client portfolios and also how to integrate them into existing investment strategies,” she said. “They want to understand the role of these assets in the portfolio over the full market cycle and also how they behave in different types of portfolios, whether it’s a growth portfolio or an income portfolio.”

The U.S. Securities and Exchange Commission (SEC) finally gave the green light to the launch of the first spot Bitcoin ETFs in January, while several Ethereum ETFs began trading last week.

Despite the launches, the SEC is still yet to approve any futures-based Bitcoin ETF applications, with many speculating that the regulatory agency is saving those approvals for later in the year.

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