A study shows that the number of US financial advisors allocating crypto in their clients’ wallets has risen significantly since 2019. The figures show that it rose by 49% in 2020, from 6.3% to 9.4%.
A large majority of the advisors also have personal crypto investments
According to the San Francisco-based asset manager Bitwise, 58% of the advisers assign to crypto are independent registered investment advisers (RIAs).
The report says the finding is not surprising. In fact, RIAs have no restrictions on the types of investments they can include in portfolios.
The survey also found that the vast majority of advisors with clients who invested in crypto had personal investments in the sphere. According to the report:
82% of advisors who reported client allocations to crypto also reported a personal investment in the space.
Advisors are still interested in increasing their crypto positions
The report further notes that 78% of advisers surveyed are thinking about increasing their clients’ crypto allocation in the next 12 months. However, 12% of them will remain “stable,” the study said.
In addition, no advisers have reported any plans to lower or remove their current crypto positions. The survey also adds:
The percentage of advisors planning to increase their clients’ cryptocurrency allocation has increased significantly this year; last year, only 42% of consultants with client allocations reported plans to increase that allocation.
With regard to the reasons for add exposure to crypto assets to clients’ wallets, the survey found a “sharp rise” among advisers praising crypto’s “high potential returns”. They also pointed out crypto’s role in “inflation hedging” as an attractive feature for the asset class. Bitwise noted:
Thirty-eight percent (38%) of advisers called ‘high potential returns’ an attractive feature of crypto, up from 30% in last year’s survey … by far the largest increase was for ‘inflation hedging’, of which 25% of advisers cited it as an attractive feature, up just 9% in last year’s results. Interest in inflation hedging instruments has risen significantly over the past year and a number of well-known institutional investors have publicly pointed to bitcoin as a possible hedge against inflation risks over the past year.
What do you think of the survey? Let us know in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons