Vast majority of financial advisors’ clients asked about crypto in 2024 – Bitwise

Bitcoin and Crypto Influence Financial Advisors: A Growing Force

A recent report by Bitwise and VettaFi reveals a significant shift in the financial sector, with financial advisors increasingly integrating Bitcoin and cryptocurrency into their asset allocation strategies. The report states that 56% of advisors are more likely to invest in crypto this year, with 2024’s US election results playing a pivot role in boosting sentiment.

Highest Level of Client Inquires

The report highlighted a significant uptick in advisor-client interactions concerning crypto. A staggering 96% of financial advisors fielded client inquiries about crypto in 2024, the highest recorded level, and a 32% increase year-over-year (YoY), from 72% in 2023. This surge has led to increasing interest from investors and advisors, driving growth for the crypto-space.

Investors Take Lead

The report highlighted a growing interest in crypto trading among investors themselves, with an astonishing 71% of individual investors investing directly in crypto. This trend echoes the 1960s boom in individual US stock ownership as investors increasingly shift towards direct allocations.

Breaking Down Barriers

Despite lingering hurdles, the barriers to entry into the crypto-advisory ecosystem are gradually crumbing. From 65%, the percentage of advisors who say they cannot allocate crypto in their clients’ portfolios has decreased due to improved perception of regulatory policies under the impending administration.

Navigating Shifts in Volatility and Returns

The report documented a shift toward more sophisticated strategy adoption among crypto-invested advisors. Professionals are now choosing to allocate portfolio assets across assets with varying features, such as thematic strategies and buffered strategies that aim to shield against volatility-driven losses.

Volatility and Regulations Remain Key Roadblocks

Despite considerable progress, fears of volatility still persist, named as the No. 1 barrier to wider adoption, along with regulatory clarity. A near-majority – 50% – of those surveyed still indicate regulatory uncertainty acts as a check on their exposure to crypto investment.

Embracing Shifts in Trends and Market Preferences

The report outlines the changing focus among advisors shifting from traditional mutual funds to decentralized and digital trading platforms. Financial advisors are progressively opting for strategies that integrate real-world data inputs, allowing asset allocation decisions be more informed as they navigate current market conditions, which have had a profound affect on the Bitcoin price.

Benchmark Survey by Bitwise

Key findings from a recent report by Bitwise and VettaFi highlights the growing preference for crypto-as-an-asset-class among investment professionals.

The portion of advisors whose clients hold invested assets in private funds or multi-strategy entities has doubled across the past four years, underscoring ^1 the gradual shift towards pooled investment vehicles over direct crypto-buys-in.

This changing landscape reflects fundamental shifts in cryptocurrency market sentiment in 2021, driven significantly by institutional actors, and will likely continue until 2027.

Overall, the changing landscape of blockchain and cryptocurrency reveals a growing need for advisors ^2 working in the same field to not only stay fully informed but learn about the importance of cryptocurrency from the perspectives mentioned above. Bitcoin’s increasing momentum is driving many to believe now is the opportunity to make entry into the game.