no way recent reports Bitwise and VettaFi found that 56% of financial advisors are more likely to invest in cryptocurrencies this year, with the 2024 US election outcome driving sentiment.
Skyrocketing cryptocurrency prices and increased regulatory clarity in 2024 will lead to greater interest from both clients and advisors. In 2024, 96% of advisors handled client inquiries about cryptocurrencies, up from 88% in 2023.
Additionally, the percentage of advisors allocating cryptocurrencies to client portfolios doubled year-over-year, from 11% in 2023 to 22% in 2024. Institutional investors (30%) and registered investment advisors (RIAs) (28%) were most likely to allocate cryptocurrencies, followed by wirehouse representatives (24%).
Advisors’ clients are also increasingly taking independent cryptocurrency positions, with 71% investing in cryptocurrencies independently of their advisors in 2024, up from 59% in 2023. These “holdings” make cryptocurrencies part of the broader wealth plan.
The report surveyed 430 qualified responses from financial advisors.
This report shows that the industry is gaining momentum. Advisors who do not yet have a cryptocurrency allocation 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 cryptocurrencies plan to maintain or increase their exposure.
political momentum
The 2024 US election marks an important turning point for cryptocurrencies. Optimism grew as President-elect Donald Trump embraced digital assets, including a proposal for a strategic Bitcoin (BTC) reserve.
Cryptocurrency advocates also scored major victories in Congress, shifting the political landscape in favor of the industry.
The report also highlighted growing speculation about a proposal from Senator Cynthia Lummis (R-WY) for the United States to purchase 1 million bitcoins over five years, with 45% of advisors believing that will happen.
The report suggests that the United States’ potential entry into the race for Bitcoin holdings could spark a global trend, with countries such as Brazil and Poland already considering similar legislation.
remaining barriers
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 incoming government.
65% of advisors are still unsure or unsure if they can allocate cryptocurrency to client accounts, which remains a significant hurdle.
Fortunately, advisors are becoming increasingly confident in their ability to value cryptocurrency assets, with only 31% citing valuation issues in 2024, down from 42% in 2023. Storage issues are also easing, with fear of hacking falling from 38% to 24% in 2022. In 2024.
strategy shift
The report also highlighted advisors’ changing preferences for cryptocurrency investment vehicles. Crypto asset ETFs (25%) remain the most popular choice as they provide a friendly entry point for advisors hesitant about direct cryptocurrency exposure.
Interest in spot cryptocurrency ETFs (22%) and various cryptocurrency index funds (19%) has surged, 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 significant attention. This approach aims to mitigate the volatility of cryptocurrencies and provide differentiated returns.
They added that 67% believe the price of Bitcoin will rise next year, up from 52% in 2023. 40% expect Bitcoin to trade between $250,000 and $1 million, while 10% expect it to exceed $1 million.
The report also noted growing confidence in Bitcoin’s long-term potential as a mainstream asset. 83% of respondents believe that Bitcoin will have a higher market capitalization than Ethereum (ETH) within 5 years.