Bitwise Asset Management, a leading provider of crypto-index funds and ETF trends, is in the news today after it published a survey revealing how financial advisors around the United States feel about crypto.
In the eyes of many, the survey’s findings validate the contention that cryptocurrencies have gone mainstream. The survey in question found that there has been a 50% increase in the number of advisors allocating to crypto, when compared to the figures from last year.
While on the surface that might sound huge, the reality is that with only 6.3% of surveyed advisors making crypto-allocations last year, out of 1000 respondents, only 94 have been making crypto-allocations this year. This was well highlighted by Matt Hougan, Chief Investment Officer at Bitwise, who said,
“The survey shows it’s still early days for crypto, with less than 10% of advisors allocating today. At the same time, adoption and interest are growing: The survey suggests the number of advisors allocating could double or more in the year ahead.”
Further, the survey also found that over 81% of all financial advisors reported receiving questions from their clients on crypto in 2020, up from 76% in 2019.
Source: Bitwise/ETF Trends 2021 Benchmark Survey Of Financial Advisor Attitudes Toward Cryptoassets.
As far as the advisors currently allocating to crypto were concerned, 54% of them did so because of crypto’s position as an asset offering ‘uncorrelated returns.’ On the contrary, 25% of these advisors did so for reasons related to inflation hedging.
What does this mean? Well, this represents a considerable shift in financial advisors’ mindset about crypto. In fact, back in 2019, 14% of the surveyed advisors thought the price of Bitcoin would fall to zero. On the contrary, today 15% expect the price of Bitcoin to exceed $100,000 within five years.
Source: Bitwise/ETF Trends 2021 Benchmark Survey Of Financial Advisor Attitudes Toward Cryptoassets.
Bitcoin has had a volatile week, with the cryptocurrency climbing to highs of $41,914 before falling to local lows of $30,305, all in just a few days. While the survey suggests that retail interest has been growing, a few trends that have remained unchanged over the years include the average retail investors’ need for better regulations and lower volatility in order to comfortably make sizeable allocations towards crypto.
