Crypto is catching the attention of some of the most influential people in finance. Matt Hougan, the Chief Investment Officer of Bitwise, recently shared some interesting insights about the growing trend of financial advisors investing in crypto.
Advisors are Buying Crypto for Themselves
At a recent financial conference, Hougan asked the attendees if they owned any Bitcoin or other cryptocurrencies. He was surprised to see that almost 70% of the advisors raised their hands! This is a huge change from previous years, when only about 10-20% of advisors owned crypto.
This shift shows that financial advisors are becoming more comfortable with crypto. They are starting to see it as a real investment option. However, while many advisors are personally investing in crypto, they are not yet recommending it to their clients.
Why are Advisors Hesitant to Recommend Crypto to Clients?
The main reason for this is that many broker-dealers are not yet allowing direct investment in Bitcoin ETFs (exchange-traded funds). These ETFs make it easier for investors to buy and sell Bitcoin. But until broker-dealers approve these ETFs, advisors can’t recommend them to their clients.
Good News for Crypto Investors
Hougan believes that this situation will change soon. He points to a few key factors:
- The US Fed recently lowered interest rates. This could make investors more willing to take on risk, including investing in crypto.
- The US Securities and Exchange Commission (SEC) has approved options on BlackRock’s Bitcoin ETF. This is a big step towards making Bitcoin more accessible to investors.
- Several spot Bitcoin ETFs have been launched this year. This includes Bitwise’s own BITB product. As more major financial institutions approve these ETFs, it will become easier for advisors to recommend Bitcoin to their clients.
The Future of Crypto in Finance
Hougan believes that the future of crypto in finance is bright. He says that once advisors start holding Bitcoin in their own portfolios, they will become more comfortable with it and more likely to recommend it to their clients. This could lead to a much wider adoption of crypto in the financial industry.
