The Evolution Of Money

What Are Advisor Attitudes Toward Cryptoassets?

The percentage looking to allocate to crypto is set to more than double in 2020, from 6% to 13%

Bitwise & ETF Trends publish 2020 Benchmark Survey of 400+ financial advisors

SAN FRANCISCO, Jan. 14, 2020 /PRNewswire/ — Bitwise Asset Management, the leading provider of cryptoasset index and beta funds, today released the findings of the 2nd annual Bitwise / ETF Trends 2020 Benchmark Survey Of Financial Advisor Attitudes Toward Cryptoassets.

The survey was conducted during December 2019. More than 400 financial advisors answered a series of questions on cryptoassets and their use in client portfolios. Survey respondents included independent registered investment advisors, broker-dealer representatives, financial planners, and wirehouse representatives from across the U.S.

Among the key findings:

  • Advisors Are Increasingly Allocating To Crypto: The percentage of advisors allocating to crypto in client portfolios is expected to more than double in 2020, from 6% to 13%.
  • Advisors Are Attracted By Crypto’s Uncorrelated Returns: The No. 1 motivation for including crypto in portfolios is the uncorrelated nature of crypto’s returns. This feature was highlighted this year by 54% of advisors completing the survey, more than any other benefit, including returns. That number was up from 47% in last year’s survey.
  • Clients Are Asking Questions About Crypto: 76% of all financial advisors report receiving questions from clients on crypto in 2019.

Advisors Are Increasingly Optimistic About Bitcoin’s Price: 64% of advisors expect the price of bitcoin to appreciate over the next five years, up from 55% of advisors in last year’s survey. 35% of advisors expect the price of bitcoin to double or more by 2024, and 5% expect it to increase by 10X or more in value.

“2019 was a breakthrough year for crypto,” said Matt Hougan, Bitwise managing director and global head of research. “Crypto was the best-performing asset class in the world last year, with the Bitwise 10 Large Cap Crypto Index rising 52%. Moreover, crypto demonstrated real value as a hedge against geopolitical risk. Meanwhile, we saw significant evolution in the market for crypto custody and liquidity, with players like Fidelity, CME, and Intercontinental Exchange all launching solutions. As the survey shows, advisors are responding to the rapid maturation of the space by increasingly planning to incorporate crypto into their asset allocation mix.”

“Crypto continues to be top-of-mind for advisors searching out new and uncorrelated sources of return,” said Tom Lydon, founder and CEO of ETF Trends. “The survey results clearly indicate growing interest in crypto from advisors and their clients alike.”

Crypto was the best-performing asset class in the world last year, with the Bitwise 10 Large Cap Crypto Index rising 52%. Moreover, crypto demonstrated real value as a hedge against geopolitical risk...

Excerpts From The 2020 Benchmark Survey

Are Advisors’ Clients Interested In Crypto?
Client interest and activity has remained much the same as in last year’s report. More than three-quarters (76%) of surveyed financial advisors reported that they had received a question from a client about crypto sometime in the past 12 months; this compares to 80% in last year’s report. Most of the advisors (64%) who reported receiving questions this year said they had received them from a small number of clients (fewer than 10% of clients). Interestingly, more than one-third of surveyed advisors (35%) believe that some or all of their clients are investing in crypto outside of their advisory relationship. An additional 37% said they didn’t know whether or not clients were investing in crypto on their own. Taken together, 72% of advisors think clients may be investing in crypto outside of their advisory relationship, up from 65% last year.

By comparison, just 27% of advisors were confident that their clients were not investing in crypto at this time. That number was down from 35% last year.

Are Financial Advisors Allocating To Crypto In Client Accounts?
Crypto remains a rare allocation in advisor portfolios and the domain of cutting-edge early adopters: Just 6% of financial advisors currently have an allocation to cryptoassets in client portfolios. Of those allocated to crypto, a strong majority (69%) are independent RIAs. That finding is not surprising, given that RIAs face fewer restrictions in terms of what types of investments to include in client accounts when compared to other categories of advisors, and are often seeking to differentiate themselves with bespoke attention to client needs. By contrast, just 2% of wirehouse representatives reported having an allocation to crypto
in client accounts.

In a repeat of last year’s findings, a majority of advisors with client assets invested in crypto also had personal investments in crypto (62%).

Complete findings from the survey are available here.

 

 

 

About Bitwise Asset Management
Bitwise Asset Management is the leading provider of index and beta funds for the cryptoasset space. The firm created the world’s first and largest cryptoasset index fund in 2017, and today manages multiple funds serving high net worth individuals, financial advisors, family offices, multifamily offices, investment managers, and institutions. Its indexes serve as the benchmark for dozens of financial institutions and crypto funds. Based in San Francisco, Bitwise’s team combines expertise in technology with decades of experience in traditional asset management and indexing—coming from firms including Facebook, Google, Wealthfront, BlackRock, Fidelity, Deutsche Bank, IndexIQ, and ETF.com. Bitwise is backed by leading institutional investors and is a frequent commentator on crypto in the press. It has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, The Wall Street Journal, The New York Times, and many other leading publications. The firm exists to be a trusted partner to investors as they navigate the cryptomarket. For more information, visit www.bitwiseinvestments.com.
About EFT Trends
ETF Trends is a trusted source of ETF industry news, insight and analysis to keep investors a step ahead in today’s investing world. Its editorial team and seasoned contributors stay on top of the latest trends in the U.S. and abroad to educate financial advisors and self-directed investors. From new ETF launches to articles on equities, fixed income, and alternatives, ETF Trends is a wide-ranging financial publication covering every aspect of the ETF universe. With the new addition of ticker research pages to the site, traffic continues its steady rise month by month. ETF Trends publisher Tom Lydon is a frequent commentator on CNBC, Fox Business Network, and Bloomberg, where he shares his expert insight on markets and trends. For more information, visit www.etftrends.com.

 

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