A survey published by crypto index fund provider Bitwise Asset Management has found the number of financial advisors allocating capital toward crypto has increased by roughly 50% in one year.
The survey, conducted in partnership with investment website ETF Trends, queried nearly U.S.-based 1,000 financial advisors in December. The findings indicate that 9.4% of client portfolios were exposed to crypto assets — up from 6.3% one year ago.
Of the investment advisors who have not yet allocated to crypto, 15% stated they will “probably” invest in virtual currency during 2021, with 2% stating they will “definitely” invest in the asset class this year.
Financial planners are much more keen to invest their personal wealth in cryptocurrency, with 24% saying they have already done so.
The global economic fallout from the coronavirus pandemic appears to be the primary motivation that is driving financial planners towards crypto assets, with 54% of respondents describing “uncorrelated returns” as the principal benefit of cryptocurrency exposure.
One-quarter of survey participants described “inflation hedging” as crypto’s most-attractive utility, up from 9% the previous year. Demand from clients also appears significant, with 81% of advisers reporting that clients have queried them regarding crypto assets in 2020, up from 76% in 2019.
Despite the growth in financial advisors making allocations to crypto, Bitwise’s CIO remarked that “the survey shows it’s still early days for crypto, with less than 10% of advisors allocating today,” adding:
“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.”
ETF Trends CEO Tom Lydon stated: "Financial advisors are increasingly looking for exposure to alternative assets, and interest in crypto is rising.”
The number of crypto-naysayers within the investments advisor community is also falling, with the number of respondents predicting BTC will plummet to zero dropping from 14% in 2019 to 8% last year, and then halving to just 4% this year.
Conversely, the number of advisors predicting six-figure Bitcoin prices within five years has increased from 4% to 15% in a single year.