As per Bitwise CIO Matt Hougan, more and more leading US financial advisors are now investing in cryptocurrencies in their own capacity. Addressing the Barron’s Advisor 100 Summit, Hougan said that 70% of the advisors in attendance were invested in crypto.
This was a stark contrast with the previous years when only 10% to 20% owned cryptocurrency. Barron’s Advisor 100 Summit took place in Palm Beach, Florida, and invited the best financial advisors in the United States.
Hougan’s keynote came after the launching of several spot Bitcoin exchange-traded funds (ETFs), such as Bitwise’s BITB. Hougan’s observation can be related to the trend of more financial experts turning towards cryptocurrencies.
Personal Crypto Investments Growing Among Financial Advisors
However, there’s still a low level of adoption among advisors as a majority of them have not included crypto-assets in the client portfolio. This is because many of these advisors work for broker-dealers which to this date have not allowed the buying of spot Bitcoin ETFs.
According to Hougan, advisors usually invest in their accounts before they recommend such strategies to their clients. Over the years, it has been common practice for financial advisors to lag personal investments in client accounts by six to twelve months.
It also means that it is only a matter of time before crypto will occupy more significant portions of client portfolios. New and ongoing regulation may speed up this shift.
SEC and Fed Decisions Favor Crypto Growth
The entry of institutional players, including big firms like Morgan Stanley, also supports this notion that institutional investors are entering the crypto space. Among the positive factors that Hougan pointed out are the Federal Reserve’s decision to cut interest rates and the SEC’s green light on options on BlackRock’s Bitcoin ETF.
These changes suggest increasing demand for cryptocurrency investment products from institutional investors. With an increasing number of financial institutions joining the crypto ecosystem, the obstacles to customer onboarding might even decrease.
Advisors’ personal experience with cryptocurrency is very likely to affect their future recommendations to clients. This shift within the financial professional community means that digital assets could be more easily integrated into the broader financial services offering in the near future.
Advisors’ Crypto Experience May Boost Client Allocations
According to Hougan, as financial advisors receive more exposure to crypto, they will change their allocations to clients. Advisors who invest in Bitcoin become somewhat experienced, which may minimize their reluctance to suggest it to their clients.
This personal use of the crypto asset-class is likely to increase the overall market uptake in the forthcoming months. According to Hougan, this is a new phase and key moment, with financial specialists gradually adapting to digital assets. As more significant entities join the market, and the number of regulatory approvals rises, the climate seems to be becoming more conducive to investing in cryptocurrencies.
