Despite the tumultuous year of 2022, investors are optimistic for 2024, especially with the potential approval of spot Bitcoin ETFs. Bitwise Asset Management, alongside VettaFi, has released a survey providing insights into financial advisors’ attitudes towards cryptocurrencies. The “Bitwise/VettaFi 2024 Financial Advisor Outlook on Crypto Assets” survey indicates a continuing interest in cryptocurrencies among clients and optimism for ETF approval, despite persistent access barriers for advisors.
The survey, conducted between October 20 and December 18, 2022, reflects the optimism prior to significant evidence of ETF approval. Notably, the SEC’s increased engagement with issuers and recent AP agreements fuel this optimism. However, less than half of the advisors expect a spot Bitcoin ETF approval in 2024, with only 39% affirming this belief, contrasting with Bloomberg ETF analysts’ 90% approval probability in January.
Key findings from the survey include the belief that ETF approval would be a major price catalyst, with 88% of advisors awaiting approval to purchase Bitcoin. Access to cryptocurrencies remains limited, with only 19% of advisors able to buy crypto from client accounts. Yet, 98% of those with current crypto allocations in client accounts plan to maintain or increase exposure in 2024.
The survey also highlights a significant increase in large crypto allocations (over 3% of a portfolio), doubling from 22% of all client portfolios exposed to crypto in 2022 to 47% in 2023. Additionally, 88% of advisors received crypto-related inquiries from clients last year, and 59% reported that their clients invest in crypto independently of the advisory relationship.
When considering investment channels for 2024, ETFs were the preferred choice. Regulatory uncertainty remains the primary barrier to greater crypto adoption in portfolios, with 64% of advisors citing it, followed by volatility concerns (47%). Preference for Bitcoin over Ethereum has also increased, with 71% of advisors favoring Bitcoin, up from 53% the previous year.