Financial advisers want a bitcoin ETF, but less than half expect approval: Survey
88% of surveyed investment professionals interested in buying BTC are waiting until a US spot bitcoin ETF is available
SEC Chairman Gary Gensler | Third Way Think Tank/"CMI 101: Demystifying Derivatives with CFTC Chairman Gary Gensler" (CC license)
More than half of financial advisers don’t expect a spot bitcoin ETF to come to market this year, a new survey found.
Yet some professional investors recognize that the approval would ease their concerns about directing funds into this sector.
The US Securities and Exchange Commission is set to rule on a spot bitcoin ETF proposed by Ark Invest and 21Shares — and potentially a bunch of others — by Jan. 10.
Bloomberg Intelligence analysts have quantified the chance of approval at 90%, with them and others citing BlackRock’s entrance into the race and Grayscale Investments’ August court win against the SEC. Some disagree, noting SEC leadership has not indicated a willingness to permit such an offering.
Just 39% of financial professionals surveyed by Bitwise and VettaFi believe a spot bitcoin ETF will be approved in 2024, according to a Thursday survey.
Nearly half of the survey’s more than 400 respondents were independent registered investment advisers (RIAs). Broker-dealer representatives, financial planners, institutional investors and other investment professionals comprised the rest.
Overall, 98% of advisors currently invested in crypto in client accounts plan to keep or increase the allocation. For those not yet allocated to the segment, 8% are definitely or probably planning on adding exposure for clients in 2024, while 21% are considering it.
Four of five advisers said they were either unable to buy crypto for clients, or unsure whether they could. Half the respondents cited clearer regulation as a factor that would ease their concerns, while 14% listed the launch of a spot bitcoin ETF as making them more comfortable to make such allocations.
To that end, 88% of advisers interested in buying BTC are waiting until after the SEC approves a spot bitcoin ETF.
“There’s a massive gap in expectations between advisers and those who monitor ETF developments for a living,” Bitwise Chief Investment Officer Matt Hougan said in a statement. “Couple that with the fact that almost 90% of advisors say they’re waiting for an ETF before making a bitcoin investment, and you see a lot of demand bubbling just below the surface.”
Bitwise and VettaFi gathered the responses from Oct. 20 and Dec. 18.
Much has happened since the end of that window, with firms continuing to file application amendments indicating intended authorized participants, fees and other details.
The survey findings come after Bitwise research analyst Ryan Rasmussen told Blockworks in October that more financial advisers were considering a greater allocation to bitcoin due to evolving macro factors, as well as expected demand and supply shocks.
Galaxy Digital research associate Charles Yu said that month in a report he expects bitcoin ETFs could see $14.4 billion of inflows in their first year of trading — increasing the asset’s price by 74% in that span.
Assets managed by RIAs, brokers-dealers and banks total roughly $48 trillion, Yu noted in the report. His flow estimate stems from an assumption that exposure to a bitcoin ETF is adopted by 10% of an initial addressable market sized at roughly $14 trillion in assets, with an average allocation of 1%.
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