At the Barron’s Advisor 100 Summit, there was a clear shift in perception of Bitcoin among America’s top financial advisors. Matt Hougan, Bitwise’s Chief Investment Officer, provided some key insights into the industry’s stance on cryptocurrencies, and Bitcoin in particular.
The latter speech highlighted an interesting session that showed a significant increase in personal investment in Bitcoin by financial advisors.
70% of Financial Advisors Personally Own Cryptocurrencies
Compared to a few years ago when only about 10-20% of attendees had any exposure to cryptocurrencies, this year saw a dramatic increase, with around 70% indicating that they personally own crypto assets .
“There’s a very sophisticated technical term economists use for this annual phenomenon: wow,” Huganwrote .
Read more: Who will own the most Bitcoin in 2024?
This change is significant; it reflects a growing interest in cryptocurrencies in the professional financial community. Despite this personal enthusiasm, Bitcoin remains rare in actual client allocations. Many advisors face regulatory and institutional barriers that prevent them from including Bitcoin exchange-traded funds (ETFs) in their client portfolios.
“Many of these advisors are working at broker-dealers who can’t even buy a Bitcoin ETF yet. But that time will come. One of the things I’ve learned in my seven years at Bitwise is that advisors almost always allocate to their own accounts first. Client allocations are typically made six to 12 months later,” Hugan said.
Additionally, recent economic developments such as the Federal Reserve’s rate cut and the SEC’s approval of Bitcoin ETF options are also positive indicators. These developments and our first-hand observations at the summit highlight the growing confidence among financial professionals in Bitcoin’s potential as an investment asset.
The increase in advisors’ personal Bitcoin holdings coincides with the performance of the cryptocurrency, which is up more than 50% year-to-date, trading at $64,000, and is seeing increased demand and investor interest.
The appeal of Bitcoin and Bitcoin ETFs is also extending to institutional investors. According to analyst Eric Balchunas, more than 1,000 institutions now hold Bitcoin ETFs on their balance sheets. In particular, BlackRock’s iShares Bitcoin Trust (IBIT) has 661 institutional holders, 20% of which are held by institutions and large advisors.
There has also been a significant shift among the top U.S. hedge funds, with 60% now owning a Bitcoin ETF , a significant increase from earlier this year. Firms like Citadel Securities, Millennium Management , and Fortress Investments are increasing their holdings, underscoring the solid institutional support for Bitcoin.
Bloomberg Senior Analyst Eric Balchunas highlighted the extraordinary growth of Bitcoin ETFs. He predicts that institutional participation will likely double in the next year. In addition, the widespread acceptance of Bitcoin ETFs among registered investment advisors indicates a broader institutional confidence in the value of BTC.
