Bitwise, which provides technology consulting, recently published a survey of American investment advisors and their appetite for crypto-currencies.
“Ignoring crypt is no longer an option for financial advisors,” the survey concluded. “As the inaugural Bitwise/ETF Trends Survey for Investment Advisors Attitudes Toward Crypto-assets shows, clients are interested, asking questions, and often investing on their own.”
“Smart advisors are taking action,” the survey continued, “For some, that means learning about crypto, so they can give smart answers to tough questions; for others, it means allocation to crypto in client portfolios. Still other advisors will likely look to build their business around crypto expertise, targeting new and younger demographic than many peers.”
The survey found that 79% of investment advisors were asked about crypto-assets, 9% had some crypto in their clients’ portfolios, and 55% expect crypto to appreciate between now and 2023.
Of those who hold crypto-assets, the survey found, “A strong majority of these advisors were independent RIA’s (69% of yes respondents), while zero wirehouse reps had crypto-assets.” An RIA is a Registered Investment Advisor. “Of note, a strong majority of investment advisors with client assets in crypto also had personal investments in crypto.”,the survey also found.
The investment advisors surveyed who have money in crypto-assets said its “non-correlated nature” was its most attractive feature. “The attribute that most attracted financial advisors to the idea of adding crypto-assets to their client portfolios was the low or non-correlated nature of crypto returns compared to traditional assets.” The survey noted.
Forty-two percent of respondents felt this way, according to the survey.
When asked why an investment advisor was not participating in crypto assets, the two most common responses were “no idea how to value them” by 43% of respondents and “regulatory concerns” by 42% of respondents, and “crypto-assets are associated with criminal activity” by 15% of respondents.
When asked what would make them more comfortable investing in crypto assets in the future, 54% said “better regulation”, 37% said “better custodial relationships”, 36% said “better education”, and 35% said “the launch of an ETF.”
On that note, 64% of investment advisors preferred crypto investment in an ETF while only 21% preferred a direct investment into a specific crypto asset.
Bitwise “delivers technology solutions that leverage data to enable business insights. By deploying our breakthrough technology innovations, we help our global clients maximize their competitive advantage. We are the industry’s most experienced and dedicated team of data professionals, optimizing value for our clients through our global delivery model and with our proprietary technology tools that reduce the time, complexity and cost of data initiatives. Together, our people and technology provide the insights clients need to continue to lead in their fields.” According to its website.