A recent report found a significant gap between advisors’ expectations and market analysts’ predictions regarding the approval of a spot Bitcoin exchange-traded fund (ETF) in 2024.
We provided in-depth information on financial advisors’ views and predictions regarding cryptocurrencies.
Financial Advisor Approves Questionable Bitcoin ETF
A Bitwise Asset Management and VettaFi survey found that 61% of financial advisors do not expect the approval of a spot Bitcoin ETF this year. Surprisingly, this contrasts sharply with cryptocurrency enthusiasts’ January estimate of an 88% likelihood of approval.
These differences indicate that the market’s readiness for these ETFs is potentially being underestimated.
Advisors’ view of approved spot Bitcoin ETFs as a significant catalyst is a key finding in the survey. In fact, an overwhelming 88% of advisors interested in purchasing Bitcoin are waiting for post-ETF approval.
Read more: How to Prepare for a Bitcoin ETF: A Step-by-Step Approach
Access to cryptocurrencies remains a barrier for many advisors. Only 19% said they were able to purchase cryptocurrencies on their customer accounts. However, the survey shows strong commitment among those who have already invested in cryptocurrencies. 98% of these advisors plan to maintain or increase their cryptocurrency exposure in 2024.
In particular, significant cryptocurrency allocations (more than 3% of the portfolio) have more than doubled in one year.
The survey also highlights continued customer interest in cryptocurrencies, with 88% of advisors receiving cryptocurrency-related questions in the past year. Additionally, 59% of advisors note that their clients invest in cryptocurrencies independently, indicating significant opportunity for their holdings.
When it comes to investment preferences, advisors are increasingly focusing on cryptocurrency asset ETFs for their 2024 allocations. Among these, regulatory uncertainty (64%) and volatility (47%) remain the biggest concerns hindering cryptocurrency adoption in portfolios. Interestingly, Bitcoin was the preferred choice over Ethereum for 71% of advisors, a significant change from the previous year.
As Bitwise CIO Matt Hougan highlighted, advisors who manage a significant portion of US wealth have not fully assessed the potential impact of approving a spot Bitcoin ETF.
“There is a huge difference in expectations between advisors and those who monitor ETF development. Coupled with the fact that nearly 90% of advisors say they are waiting for an ETF before making a Bitcoin investment, you can see a lot of demand bubbling up just beneath the surface,” Hougan said.
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