A recent report by Bitwise and VettaFi reveals that 56% of financial advisors are more likely to invest in crypto this year, with the 2024 US election results pivoting sentiment.
Soaring cryptocurrency prices in 2024 and increased regulatory clarity have sparked greater interest from clients and advisors. In 2024, 96% of advisors responded to client crypto inquiries, the highest level recorded, up from 88% in 2023.
Additionally, the proportion of advisors allocating cryptocurrencies in client portfolios doubled year-over-year to 22% in 2024, up from 11% in 2023. Institutional investors (30%) and investment advisors Registrants (RIAs) (28%) were most likely to assign crypto, followed by transmission center representatives (24%).
Advisor clients are also increasingly taking independent positions in cryptocurrencies, with 71% investing in cryptocurrencies independently of their advisors in 2024, up from 59% in 2023. These “held” assets represent a growing opportunity for advisors seeking to integrate cryptocurrencies into broader wealth projects.
The report surveyed 430 eligible responses from financial advisors.
The report paints a picture of an industry that is gaining momentum. Advisors who have not yet allocated cryptocurrencies are increasingly inclined to do so, with 19% planning to invest in 2025, up from 8% last year.
Meanwhile, 99% of advisors already investing in crypto plan to maintain or increase their exposure.
Political dynamics
The 2024 US elections marked an important turning point for crypto. President-elect Donald Trump’s embrace of digital assets, including a proposed Bitcoin (BTC) strategic reserve, has fueled optimism.
Additionally, pro-crypto candidates scored key victories in Congress, tilting the political landscape in favor of the industry.
The report also highlights growing speculation over Sen. Cynthia Lummis’ (R-WY) proposal that the U.S. buy 1 million Bitcoins over five years, with 45% of advisors believing this will happen.
The report suggests that the United States’ potential entry into the race for Bitcoin reserves could spark a global trend, with countries like Brazil and Poland already considering similar legislation.
Remaining obstacles
Despite growing enthusiasm, challenges remain. Volatility (47%) and regulatory uncertainty (50%) remain the biggest barriers to advisor adoption. However, regulatory concerns have decreased compared to previous years, reflecting a more favorable outlook under the new administration.
65% of advisors still cannot or are not sure they can allocate cryptocurrencies to client accounts, which remains a significant barrier.
Encouragingly, advisors are increasingly confident in their ability to value crypto assets, with only 31% citing valuation concerns in 2024, compared to 42% in 2023. conservation are also easing, with fear of piracy falling from 38% in 2022 to 24%. in 2024.
Changing strategies
The report also highlighted the changing preferences of advisors when it comes to crypto investment vehicles. Crypto stock ETFs (25%) remain the most popular choice, as they provide a familiar entry point for advisors hesitant to gain direct exposure to crypto.
Interest in spot crypto ETFs (22%) and diversified crypto index funds (19%) has increased, reflecting the growing appeal of professionally managed options.
The report notes that advisors are exploring more sophisticated strategies, with thematic strategies (26%) and buffer strategies (24%) receiving particular attention. These approaches aim to mitigate the volatility of cryptocurrencies and generate differentiated returns.
He added that 67% believe the price of Bitcoin will increase over the next year, up from 52% in 2023. By 2030, 40% expect Bitcoin to trade between 250,000 and 1 million of dollars, and 10% predict it could exceed $1 million.
The report also notes a growing belief in the long-term potential of Bitcoin as a primary asset. 83% of respondents believe that Bitcoin will have a higher market capitalization than Ethereum (ETH) within five years.
