In a revealing discussion, Samara Cohen, BlackRock's ETF and Index Investments Leader, shared her vision for the integration of digital assets within traditional finance. Overseeing $6.6 trillion in assets, Cohen emphasizes the transformative role of ETFs and blockchain technology in modernizing financial markets.
Driving Financial Market Modernization
Samara Cohen describes herself as a "market modernizer," focusing on enhancing market resilience, transparency, and accessibility. Before leading ETF efforts at BlackRock, she worked in fixed income and derivatives at major investment banks. She now collaborates closely with the firm’s digital assets team to explore the potential of cryptocurrencies.
Cohen views ETFs as a disruptive innovation—much like blockchain—that promotes market modernization. She notes that technological advancement has always been central to financial evolution, a pattern consistent throughout history.
The Convergence of Blockchain and Traditional Finance
According to Cohen, we are currently witnessing the early stages of integration between blockchain-based assets and conventional financial systems. The launch of bitcoin exchange-traded products (ETPs) in the U.S. one year ago marked a symbolic milestone—but it is only the beginning.
These bitcoin ETPs serve as a bridge between crypto and traditional finance (TradFi), benefiting both types of investors:
- Traditional investors gain exposure through familiar vehicles
- Crypto-native users find ETPs meet their needs effectively
Data shows many investors first engage with crypto through ETPs before exploring other products. Currently, this integration involves only a few digital assets and relies on TradFi infrastructure. Cohen advocates for building bridges that incorporate the best of both worlds, rather than completely replacing existing systems.
Technology Evolution and Market Transformation
Cohen compares the current state of crypto assets to the dial-up internet era. Just as the internet evolved from slow connections to high-speed broadband, crypto is transitioning from its early form to a more mature phase.
Two perspectives define this evolution:
The "Dial-Up" Phase (Current State):
- Bitcoin and Ethereum ETFs act as "analog versions" of crypto
- Digital assets are being fit into traditional finance frameworks
The "Broadband" Vision (Future State):
- Traditional institutions may migrate operations to blockchain
- Specialized financial blockchains could emerge
Cohen raises a critical question: is full decentralization truly ideal for markets and investors? She highlights the need for balance—leveraging crypto's transparency and auditability while recognizing the historical value of intermediaries. The goal, she suggests, is improving trust mechanisms, not eliminating intermediaries entirely.
Growth of the Options Market
BlackRock’s iShares Bitcoin ETF and Ethereum ETP dominate options trading volume. By partnering with exchanges like Nasdaq, BlackRock helped establish a robust options ecosystem—with bitcoin ETF options launching a day earlier than competitors.
The iShares platform spans multiple asset classes and markets, offering extensive connections within the trading ecosystem. Key characteristics of bitcoin that attract market attention include:
- High volatility
- Volatility of volatility (VOV)
- Positive skew (volatility tends to rise with price increases)
Options markets enable new trading mechanisms for crypto ETFs. Despite multiple sources of price information in crypto, the introduction of exchange-listed volatility tools has led to:
- Standardized investment methods
- Measurable volatility trends
- Real-time trade monitoring
Data indicates that many institutional investors first entered the ETF market via options two decades ago. Options provide additional avenues for market participation, allowing investors to tailor risk exposure.
The development of the options market has enhanced trading in several ways:
- Standardization of trading methods
- Improved price discovery
- Expanded risk management tools
- Increased market liquidity
Education Over Hype: A Long-Term View
A common saying in the bitcoin community is that "price is the best marketing." However, Cohen believes that education is bitcoin's best marketing tool. Education efforts should focus on risk management, portfolio diversification, and understanding asset correlations.
Although bitcoin reached new highs recently, it remains a high-risk, high-volatility asset. This volatility is precisely what gives bitcoin its unique value as a portfolio diversifier. Without these characteristics, its investment thesis would be far less compelling.
For long-term investors, understanding these fundamentals is more important than tracking short-term price movements. This highlights a common misconception in crypto: many assume ETF success is directly tied to the price of the underlying asset. In reality, the criteria for judging ETF success are very different.
BlackRock measures the success of an ETP based on:
- Whether it meets investor needs
- Providing efficient market access
- Ensuring strong liquidity
- Enabling effective price discovery
How ETF Success Is Really Measured
Cohen, representing the traditional finance perspective, clarifies misunderstandings within the crypto community regarding how ETFs are evaluated. For example, some claim Ethereum ETFs have underperformed compared to bitcoin ETFs—but from a professional ETF standpoint, Ethereum ETFs have been quite successful.
Key metrics for ETF success include:
Tracking Accuracy:
- The ETF must precisely track its underlying index
- Bitcoin ETFs solved problems related to self-custody and exchange risks
- They avoid the position limits common with futures-based ETFs
Market Quality:
- Requires full ecosystem support
- Includes trading volume, liquidity, and exchange access
- Depends on authorized participants (APs) for creation/redemption
- Both bitcoin and Ethereum ETFs demonstrate strong market quality
Why Flow Patterns Differ:
- ETFs don’t directly drive fund inflows
- Investor sentiment and thesis clarity are what matter
- Bitcoin’s investment narrative was clearer than Ethereum’s in 2020
- This explains differences in capital allocation
Performance Reality:
- Bitcoin ETFs broke historical records
- Ethereum ETFs still rank in the top 20% of U.S. ETF launches this year
- Both are considered successful products
👉 Explore more ETF investment strategies
Key takeaway: Bitcoin’s story is simpler (limited supply, digital gold). Success depends not only on technical performance but also on clear narrative and identity.
Current ETF Trends and Market Dynamics
Ethereum ETF Development Timeline:
- The SEC unexpectedly approved Ethereum ETFs in May 2023
- The industry faced uncertainty regarding launch timing between June and July
- Firms had to simultaneously prepare portfolios, trading ops, and education strategies
Current Market Trends:
Investor Profiles:
- Range from retail to sophisticated institutional players
- Self-directed investors are primary drivers
- Most understand the differences between bitcoin and Ethereum
Bitcoin’s Narrative Strength:
- Aligns with current geopolitical tensions
- Addresses concerns about U.S. dollar deficits
- Serves as a effective portfolio diversifier
- Particularly valuable after the 2022 stock-bond correlation breakdown
Ethereum’s Challenges:
- For U.S. investors already heavy in tech stocks
- Acts as an "amplifier" rather than a "diversifier"
- Shows higher correlation with big tech equities
Investor Education Progress:
- Understanding of both assets continues to deepen
- Bitcoin currently better fits portfolio allocation needs
- Market education remains an ongoing process
ETF Protocol Upgrades
Regarding future protocol upgrades for Bitcoin and Ethereum, BlackRock’s stance as an ETF issuer is guided by these principles:
- How the ecosystem best serves the company and its clients
- Support for open architecture and interoperability
- Meets the practical needs of institutional-scale operations
Due to its massive operational scale, BlackRock faces limitations in closed ecosystems. This is why the firm has shifted toward supporting public blockchains over permissioned chains in tokenization projects in recent years.
In terms of specific立场, BlackRock focuses on:
- System scalability
- Participation requirements for counterparties
- Overall ecosystem openness rather than endorsing specific crypto platforms
Predictions for 2025 ETF Development
Looking ahead to 2025, BlackRock highlights several key areas of focus:
- First, they hope to see continued research on bitcoin’s role in portfolio construction. The discussion should shift from "whether to invest in bitcoin" to "how to use bitcoin effectively within a portfolio."
- Second, the introduction of bitcoin ETP options—a significant innovation since November 2023—is crucial. Options ecosystems help create balanced trading dynamics, with buying during downturns and selling during rallies. However, innovation often brings complexity. While many institutions are eager to launch options-based strategies, not all are easily understood by investors. Enhanced education will be essential.
Future ETF Plans and Digital Asset Strategy
Regarding future digital asset ETF plans, BlackRock maintains a cautious and practical approach.
Common Misconceptions vs. Reality:
- Many believe ETF launches automatically drive up asset prices
- Bitcoin ETF success reinforced this belief
- Ethereum ETF performance shows the correlation isn’t automatic
How ETFs Actually Impact Assets:
- Provide更方便的投资渠道
- Bring a degree of legitimacy
- Reduce regulatory uncertainty
- May attract new pools of capital
BlackRock’s Investment Principles:
- Based on clear investment theses
- Focus on underlying cash flow evaluation
- Emphasis on risk metrics
- Consideration of client portfolio needs
Observations on Flows:
- Bitcoin ETFs have seen ~$36 billion in net inflows
- Secondary market trading volume is 9x primary market volume
- Institutional investors use multiple channels—ETFs are just one option
Current Digital Asset Priorities:
- Bitcoin and Ethereum ETF operation and development
- Tokenization projects, especially tokenized treasury funds
- Stablecoin-related initiatives
Looking Forward:
- Current focus remains on bitcoin and Ethereum ETFs
- Digital asset strategy rests on three pillars: cryptocurrencies, stablecoins, and tokenization
- New product development will continue to be client-driven
Impact of the New Administration
With a new administration taking office—one oriented toward free-market and pro-business policies—the crypto industry anticipates changes. SEC Chairman Gary Gensler’s expected departure will affect not only crypto-native firms but also traditional institutions like BlackRock. It’s important to note that the SEC’s influence extends beyond the U.S., impacting global financial markets.
Historically, the U.S. market has excelled in balancing innovation and investor protection, contributing to its current dominance. The present regulatory environment was largely shaped by market changes during 2020-2021, when:
- Retail participation surged due to commission-free trading
- Pandemic-era technology adoption accelerated
- Government stimulus checks provided investable capital
Many of these individual traders later transitioned into index and ETP investors, fueling ongoing market evolution.
Future Outlook and Regulatory Clarity
BlackRock remains optimistic about the future, anticipating a return to balanced market development. Despite recent regulatory ambiguity around crypto ETFs, the firm expects improvements ahead. They look forward to a more innovation-friendly regulatory environment while stressing that appropriate rules are essential for maintaining investor confidence.
For 2025, BlackRock is focusing on three core areas:
- Establishing basic definitions for various digital assets
- Clarifying regulatory jurisdiction and agency responsibilities
- Building public-private collaboration mechanisms
Regarding the FIT 21 Act and stablecoin legislation, BlackRock views these as positive steps. However, they must be integrated with existing TradFi systems to avoid creating parallel regulatory regimes that discourage participation from established institutions.
Cohen notes that although 2023 was challenging—with strong industry frustration over regulatory uncertainty—the focus should now return to the core mission: building a more transparent and inclusive financial system.
The industry may be entering a "golden age," driven by three key factors:
- Lower-cost block space
- More accessible development environments
- Clearer regulatory prospects
Frequently Asked Questions
What is the difference between a Bitcoin ETP and a Bitcoin ETF?
An Exchange-Traded Product (ETP) is a broader category that includes ETFs. Bitcoin ETPs provide exposure to bitcoin but may have different structures. ETFs are a specific type of ETP that must meet certain regulatory standards, offering continuous creation/redemption processes and daily disclosure requirements.
Why does BlackRock emphasize education over price performance?
As a long-term asset manager, BlackRock believes informed investors make better decisions. Understanding risk, volatility, and portfolio role leads to more sustainable investment behaviors than simply chasing price trends.
How do options improve the crypto ETF market?
Options provide additional tools for risk management, price discovery, and liquidity. They allow investors to hedge positions, generate income, and implement sophisticated strategies without directly trading the underlying asset.
Will BlackRock launch ETFs for other cryptocurrencies?
The firm currently focuses on bitcoin and Ethereum ETFs. Any future offerings will depend on client demand, regulatory clarity, and a clear investment thesis for the underlying asset.
How might new regulations affect crypto ETFs?
Clearer regulations could lead to more product innovation, broader investor access, and improved institutional participation. Better-defined rules reduce uncertainty and encourage long-term investment.
What role does tokenization play in BlackRock’s strategy?
Tokenization of real-world assets like treasury funds represents a major innovation frontier. It can improve efficiency, liquidity, and transparency in traditional markets using blockchain technology.