On 11 January 2024, Samar Cohen, Chief Investment Officer of ETFs and Index Investments at BlackRock, appeared on CNBC’s “Squawk on the Street” with Bob Pisani to discuss the launch of the ten new spot Bitcoin ETFs approved by the U.S. SEC on 10 January 2024.
Initial Trading and Market Response
Cohen expressed excitement about the orderly trading observed on the launch day, noting it as a positive sign. BlackRock’s ETF was among the volume leaders, indicating strong investor interest.
ETF Performance and Tracking
Cohen emphasized that investors are primarily concerned with how well these ETFs track the performance of Bitcoin. She highlighted the importance of market quality, liquidity, spreads, and accurate tracking in delivering what investors seek, which is exposure to spot Bitcoin. She expressed optimism that BlackRock’s ETF would meet these expectations.
Market Liquidity and Spreads
Observing the market, Cohen noted that the spreads were just a few pennies, indicating good liquidity. This is a positive sign for the ETF’s health and investor interest.
Investor Inflows and Usage
Cohen mentioned that it’s still early to gauge inflows accurately, as they can only track secondary volumes at this stage. She anticipates that investor usage of Bitcoin ETFs will become clearer over time.
Institutional Adoption and Education
Cohen believes that the launch of Bitcoin ETFs will be an important journey of education for all types of investors, including institutions. She stressed that investor demand for Bitcoin access through ETFs was a significant driver behind the SEC’s approval.
Marketing and Risk Communication
BlackRock is focusing on educating partners about the ETF wrapper’s characteristics and convenience. Cohen emphasized the importance of investors considering the underlying asset’s volatility and risk characteristics, just as they would with any ETF.
Pricing and Competition Among ETFs
With many competitors in the market, Cohen acknowledged that pricing is a crucial factor. BlackRock’s ETF is priced at 12 basis points (for the first $5 billion in assets in the first 12 months, then settling at 25 basis points), with some competitors offering zero fees for the next six months. She believes that performance, in terms of tracking accuracy and market quality, will be key differentiators for investors.
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