Ben Strack

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                <li>A report by Bitwise Asset Management and ETF Trends found that 94% of financial advisors fielded crypto questions from clients in 2021 </li>
                <li>There was a roughly even split between advisers considering an investment in crypto equities versus direct crypto investments this year</li>
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<p>Financial advisors increasingly included crypto in client portfolios last year, according to <a href="https://static.bitwiseinvestments.com/Research/Bitwise-ETF-Trends-2022-Benchmark-Survey.pdf">a recent survey</a> — and even more money managers plan to deploy capital in the space this year.</p>



<p>The findings, released by Bitwise Asset Management and ETF Trends on Thursday, indicate that the percentage of financial professionals investing client funds in crypto rose from 9% to 15% over the past year. Most holdings, for now, are small, with 80% of respondents capping digital assets to 5% of a given portfolio.&nbsp;</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="708" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg" alt="" class="wp-image-15807" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=372 372w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=378 378w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=317 317w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-2-1024x708.jpg?w=1470 1470w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure></div>



<p>“Crypto has gone from a tulip craze-style fad to a real, lasting phenomenon,” ETF Trends Managing Editor Lara Crigger told Blockworks. “Advisors can&#8217;t just ignore the questions anymore. They must be proactive about crypto education, not just for their clients but for themselves.”</p>



<p>The survey included 619 responses from independent registered investment advisors, broker-dealer representatives and financial planners in the US.&nbsp;</p>



<h3 class="wp-block-heading"><strong>Allocations to the space grow</strong></h3>



<p>To go along with the 15% of advisors that invested in crypto last year, an additional 14% said they will “probably” or “definitely” have crypto holdings this year.&nbsp;</p>



<p>The expected increase comes as 94% of advisors reported receiving questions from clients about crypto in 2021, up from 81% the year before</p>



<p>Crigger said she expects advisors adding crypto to their clients’ investment mix to rise sharply, noting that 47% of advisors said they have personal crypto holdings — a near-doubling from the year before.&nbsp;</p>



<p>“Seems like an odd mismatch, perhaps, but I think advisors aren&#8217;t willing to put their clients in something that they haven&#8217;t experienced for themselves,” she said. “Right now, they&#8217;re conducting hands-on research, using their own accounts. If it makes sense, they&#8217;ll apply that knowledge to their clients&#8217; portfolios.”&nbsp;</p>



<p>More advisors than now, however, are remaining on the sidelines, citing volatility concerns, plus a lack of regulatory clarity.&nbsp;</p>



<div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg" alt="" class="wp-image-15808" width="553" height="768" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=737 737w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=216 216w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=185 185w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=188 188w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=158 158w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=58 58w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=36 36w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Advisor-Crypto-Survey-Chart-737x1024.jpg?w=944 944w" sizes="auto, (max-width: 553px) 100vw, 553px" /></figure></div>



<p>Though more than half of respondents said they’re concerned about volatility, the same number believe that bitcoin will top $100,000 within five year. Just 15% last year estimated the cryptocurrency would rise that high over the same period.&nbsp;</p>



<p>Bitcoin traded around $42,600 at 4 p.m. ET on Thursday, up 1.8% over the last 24 hours.</p>



<h3 class="wp-block-heading"><strong>Ways to invest in crypto</strong></h3>



<p>Though the US Securities and Exchange (SEC) approved <a href="https://cms.blockworks.co/what-does-demand-for-bitcoin-futures-etfs-look-like-in-2022/">bitcoin futures-based ETFs</a> to hit the market in October, the agency <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/">has not yet approved</a> an ETF that would invest in bitcoin directly.&nbsp;</p>



<p>The SEC on Thursday denied a bitcoin ETF proposed by First Trust and SkyBridge Capital, according to a<a href="https://www.sec.gov/rules/sro/nysearca/2022/34-94006.pdf"> filing</a>.</p>



<p>The survey found that 82% of advisors said they’d prefer investing in a spot bitcoin ETF versus a futures-based alternative&nbsp; — which could be a long ways off in the U.S.&nbsp;</p>



<p>Meanwhile other advisors are focused on investing in the stocks of companies with exposure to digital assets. About 46% were bullish on buying crypto-related equities, compared to 45% interested in buying crypto outright.&nbsp;</p>



<p>The outlook on blue-chip crypto stocks such as Coinbase has become more rosey lately as companies look to diversify their revenue streams. Bank of America Research Analyst Jason Kupferberg said in a research note earlier this month that he’s upgraded Coinbase to a buy rating as the company plans to add products this year.&nbsp;</p>



<p><meta charset="utf-8"><a href="https://cms.blockworks.co/ark-invest-coinbase-is-an-attractive-long-term-play/">Research professionals at Ark Invest have said</a> that Coinbase’s position as a crypto on-ramp and its additional planned launches make it an attractive long-term play. The firm bought about 200,000 shares of Coinbase across three of its ETFs over a two-day span earlier this month.</p>



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