What You Need to Know
- In a survey, 72% of advisors who embrace digital assets said a spot crypto ETF would make them more likely to invest client assets in crypto.
- Bitcoin futures ETFs are popular among these advisors.
- Most said they would like to use a broad-based crypto index fund.
More than 70% of advisors would be more likely to invest their clients’ assets in cryptocurrency if a spot crypto ETF was offered in the U.S., according to the findings of a new Nasdaq survey of 500 advisors who are currently allocating or considering allocating to crypto.
Eric Balchunas, senior ETF analyst at Bloomberg, estimated in a tweet Monday morning that advisors collectively control $26 trillion in client assets in the U.S.
Michael Krause, co-founder and CIO of Counterpoint Mutual Funds, replied that only a minority of advisors embrace crypto and that this group likely skews younger — in other words, these advisors control fewer assets.
It “wouldn’t surprise me if this is 5% of your 26T number at most,” Krause told Balchunas.
How Advisors Invest in Crypto
Meanwhile, 86% of advisors already investing in crypto plan to increase their allocations within 12 months, according to the survey, conducted in March by marketing research consultancy 8 Acre Perspective, Nasdaq said Monday in announcing the findings.
None of those advisors said they planned to decrease their crypto allocations.
Within that same group, 50% said they were already using Bitcoin futures ETFs and 28% said they planned to start using them in the next 12 months, according to Nasdaq.
On average, advisors currently or considering investing in crypto said their ideal crypto allocation was 6% of a client’s total portfolio.
About 69% of those advisors would consider using an index fund for broad exposure, followed by sector-specific index funds (57%), actively managed funds (52%), individual digital assets (40%) and high-yield funds (31%), Nasdaq said.
Although there is strong interest in a passive approach to crypto and a spot crypto ETF, the advisors surveyed said they were not confident such a product would be approved in 2022. Only 38% found that likely, while 31% found it unlikely, 24% found it neither likely nor unlikely and 7% said they were not sure.
“Over the last decade, financial advisors have been focused on shifting assets into index funds,” according to Jake Rapaport, head of Digital Asset Index Research at Nasdaq.