A study by Bitwise Asset Management, the provider of crypto index funds, shows that the number of financial advisors allocating capital to crypto has increased by about 50% in a year.
The survey, conducted in conjunction with investment website ETF Trends, surveyed nearly 1,000 US financial advisors in December. The findings indicate that 9.4% of client portfolios were exposed to crypto assets – up from 6.3% a year ago.
Of those investment advisers who have not yet committed to crypto, 15% said they will “likely” invest in virtual currencies in 2021, while 2% will “definitely” invest in the asset class this year.
Financial planners are much more interested in investing their personal wealth in cryptocurrency, with 24% saying they have already done so.
The global economic consequences of the corona pandemic appears to be the main motivation driving financial planners towards cryptocurrencies, with 54% of respondents describing ‘uncorrelated returns’ as the main benefit of cryptocurrency exposure.
A quarter of the survey participants described “inflation hedgingAs crypto’s most compelling utility, up 9% last year. Client demand also seems significant with 81% of advisers reporting that clients asked them questions about crypto assets in 2020, up from 76% in 2019.
Despite the growth in the number of financial advisors allocating to crypto, Bitwise’s CIO noted that “the survey shows that it is still in its infancy for crypto, with less than 10% of advisers allocating today,” added :
“At the same time, acceptance and interest are on the rise: the survey suggests that the number of advisers who allocate could double or more in the coming year.”
Tom Lydon, CEO of ETF Trends, said, “Financial advisors are increasingly looking for exposure to alternative assets and interest in cryptocurrencies is on the rise.”
The number of crypto naysayers within the investment adviser community is also declining, with the number of respondents predicting that BTC will fall to zero, from 14% in 2019 to 8% last year and then halving to just 4% this year.
Conversely, the number of advisors predicting six-digit Bitcoin prices in five years has increased from 4% to 15% in one year.