- A survey of 500 financial advisors showed that 72% would like to invest more in bitcoin and the broader crypto sector if a bitcoin ETF is approved.
- Those surveyed have already invested in bitcoin or other cryptocurrencies, or are seriously considering allocation to the asset class.
- Less than 9% of advisors are confident in their ability to expertly advise clients within the asset class, demonstrating an educational gap between traditional finance and the emerging cash system.
In a Nasdaq survey of 500 financial advisors that have already committed or are considering allocating bitcoin and other crypto-based products, 72% would invest more in the space if an ETF was approved, according to the press. which details the results.
“Over the past decade, financial advisors have focused on shifting assets into index funds,” Jake Rappaport, head of digital asset index research at Nasdaq, said in the statement. “As they incorporate digital assets into their investment strategies, they are showing a strong interest in a similar instrument that can offer broad exposure to the asset class to their clients.”
Financial advisors, both individuals and institutions, have a broader interest in bitcoin and other cryptocurrencies. While this is true, it is important that you keep the right perspective in mind as these conversations develop.
According to a January survey by Bitwise, one of the world’s largest cryptocurrency managers, financial professionals dedicated to bitcoin and other products rose to 15%, up from 9% a year earlier. These numbers provide a responsible forecast for the adoption of financial professionals because they show that we still have a long way to go. However, continuing to look at those who are already allocated the space still provides tremendous value.
The Nasdaq survey found that 86% of advisors who previously allocated to bitcoin or other cryptocurrencies plan to increase the allocation over the next 12 months, while none of them intend to roll out from their portfolios. Of the same sample category, 50% are already using a Bitcoin-based ETF futures contract, and another 28% intend to use them within 12 months.
As this survey represents only a small portion of financial advisors, it is still certain that professionals entering the space quickly realize value to their investors and exploit them for the long term. Despite the favorable terms that financial advisors dedicated to bitcoin and other cryptocurrencies understand, there is still a lot of skepticism about the hope that the ETF will be approved immediately this year.
While 7% of those surveyed are unsure whether an immediate ETF prospects in 2022 will succeed, 38% find it likely to succeed, 31% anticipate failure, and 24% of those surveyed take a neutral stance.
The lack of confidence in getting immediate approval from an ETF should be a signal to those who are not dedicated to bitcoin as the demand for those who are already investing is increasing day by day, and they will likely look to take advantage of the first mover advantages over those slower in the process. adoption.
Of those surveyed, registered investment advisors represent 34% of the user base, while 19% are owned by independent broker-dealers and another 17% are owned by telecommunications room advisors. Only 7% mentioned ESG as important criteria for investment strategies, 10% felt familiar with Bitcoin and other cryptocurrencies, and only 9% felt confident in their advisory capabilities. The vast majority (98%) would like to further their education in the broader cryptocurrency field.
It is important to reiterate that only 9% of those surveyed feel confident in their ability to advise on Bitcoin and other cryptocurrencies. As noted above, this is a smaller percentage of the total financial advisory ecosystem, however, among respondents, less than 1 in 10 advisors feel they know what they are doing.
“Cryptocurrency flows through advisor channels show no signs of stopping, even as advisors grapple with compliance considerations and seek guidance from educational materials from other industry participants, including asset managers and index providers,” Rappaport said. “We expect ESG and crypto considerations to converge as investors continue to direct assets into both.”
While traditional finance tries to establish itself among an emerging discipline, financial advisors still have a lot to learn. However, the educational gap does not appear to be slowing down attempts to monetize the bitcoin ecosystem.
“The vast majority of advisors we surveyed are either planning to start allocating to cryptocurrencies or increasing their existing allocation to crypto,” Rappaport said. “As demand continues to grow, consultants will be looking for an enterprise solution to the encryption issue that now dominates client conversations.”