Crypto enjoyed a landmark 2024, with regulatory approval of the first spot bitcoin and spot ethereum ETFs in the first seven months of the year, and surging enthusiasm for the digital currency following the November presidential election.
Fifty-six percent of advisors in a post-election survey said they were more likely to invest in crypto in 2025 as a result of the election, according to Bitwise Asset Management, a crypto-specialist manager, and VettaFi, an ETF data platform.
Twenty-two percent of advisors reported that they had allocated to crypto in client accounts this past year, double the 2023 rate and an all-time high for the survey. Not surprising, considering that 96% of advisors received a question about crypto from clients last year.
“Advisors are awakening to crypto’s potential like never before, and they’re allocating like never before,” Bitwise chief investment officer Matt Hougan said in a statement.
Hougan sees much more room to run, noting that two-thirds of financial advisors still are unable to access crypto for clients.
“We see that changing in 2025 as the Mainstream Era of Crypto continues apace,” he said.
Bitwise and VettaFi sent advisors a series of questions on crypto assets and their use in client portfolios in the week after the election. By Dec. 20 they had received responses from more than 400 RIAs, broker-dealers, financial planners and wirehouses.
Opportunity Beckons
Nearly all advisors in the survey who have an allocation to crypto in client accounts said they plan to either maintain or increase that exposure in 2025. Nineteen percent of those who have yet to allocate for clients said they definitely or probably would add exposure in 2025, up from 8% in last year’s survey. Crypto equity ETFs continue to be their top choice.
When choosing a bitcoin ETF, 58% of advisors said expense ratio was their most important criterion, followed by 46% who said it was the brand of the issuer and 43% who cited issuer support.
Only 28% of advisors named an ETF’s assets under management as their most important selection criterion, indicating, the study said, the importance that advisors place on subject matter expertise among asset managers in a specialized industry like crypto.
The survey identified a big opportunity for advisors to bolster client relationships by bringing into the fold those who are investing in crypto on their own and helping them integrate into a broader wealth plan. Seven in 10 respondents reported that some or all of the clients were investing in crypto outside the relationship.
Half of advisors in the survey cited regulatory uncertainty as the top obstacle to future crypto investments, still significant but well down from previous surveys when it ranged from 60% to 65%.
Credit: Adobe Stock
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.