- Though clients remain interested in crypto, only 19% of advisors can currently offer it due to lack of regulatory clarity; those who do allocate are increasing exposure, with nearly half now above 3%.
- Expectations for a spot bitcoin ETF in 2024 are surprisingly low at 39%, presenting a potential demand surge if approved; advisors strongly prefer bitcoin over Ethereum and crypto equities over direct ownership.
- Regulatory uncertainty and volatility are the biggest barriers to greater crypto adoption according to advisors, though interest persists.
Financial advisors remain interested in crypto assets for client portfolios, but regulatory uncertainty and volatility are top concerns according to the 2024 Bitwise/VettaFi Benchmark Survey. The survey of over 400 advisors suggests the approval of a spot bitcoin ETF could drive more demand than many anticipate.
Advisor Access to Crypto Remains Limited
Despite persistent client interest, only 19% of advisors said they can currently buy crypto assets in client accounts. The vast majority are waiting for additional regulatory clarity before making allocations.
Advisors That Allocate Are Increasing Exposure
For advisors who do allocate to crypto, exposure is rising. Nearly half now have allocations above 3% of client portfolios compared to just 22% last year. And 98% of advisors already invested in crypto plan to maintain or increase allocations in 2024.
Spot Bitcoin ETF Expectations Are Surprisingly Low
Just 39% of advisors expect a spot bitcoin ETF to be approved in 2024, even though analysts peg the odds much higher. This gap suggests approval could drive more new demand than many anticipate.
Advisor Preferences: Bitcoin Over Ethereum and Crypto Equities Over Direct Ownership
If advisors do gain more access, they prefer bitcoin over Ethereum by a wide margin (71% to 29%). And their top choice for crypto exposure is crypto equity ETFs rather than direct crypto ownership.
Regulation and Volatility Are the Biggest Barriers
While client interest persists, 64% of advisors cited regulatory uncertainty as the top barrier to greater crypto adoption. Volatility was the second most pressing concern.
Conclusion
Overall the survey shows advisors remain intrigued by crypto assets but are still hampered by limited access. If a spot bitcoin ETF is approved, it could drive far more new demand than advisors anticipate based on their surprisingly low expectations.
