According to the results of the fifth annual Bitwise/VettaFi 2023 Survey of Expert Attitudes Towards Crypto Assets, financial advisors remain highly interested in the cryptocurrency market despite the industry’s depreciation in 2022. Here are the details…
Fund managers are not leaving the cryptocurrency space
Fund manager Bitwise Asset Management and VettaFi, a leading data-driven ETF platform, released the results of their annual survey Wednesday. Last year. This figure is roughly equivalent to last year’s 16 percent result, and in particular significantly better than results in 2020 (6 percent) and 2021 (9 percent). Ninety percent of those surveyed said they received inquiries from customers about the asset class. The most common question was: “Should I consider investing in crypto?”
The survey also revealed that 59 percent of advisors have clients who have independently invested in crypto outside of their advisory relationship. This is largely due to a lack of access, as only 29 percent of advisors report being able to purchase coins on their client accounts, while the remaining 71 percent are prevented from doing so by company policy.
Emphasis was placed on regulation in the report
“The survey reminds us that crypto is one of the best business development opportunities in the financial advisor market,” said Matt Hougan, Bitwise Asset Management Chief Investment Officer. 52% of those who can buy coins for customers are currently actively allocating on behalf of customers. The biggest obstacle to recommending cryptos to their clients was regulatory uncertainty, with 65 percent of advisors claiming it was a barrier to further crypto adoption.
“The ongoing debate about asset classification, tax reporting requirements is both a natural consequence of crypto’s growing presence and an obstacle to its further adoption,” the report said. “Better regulation” was described by 75 percent of advisors (up from 55 percent a year ago) as a critical step towards increasing their confidence in allocating cryptocurrencies. Overall, the surveyed financial advisors about the crypto market are bearish in the short term but remain bullish in the long term. Sixty-three percent of respondents said they expect the BTC price to drop in 2023, while 60 percent think the coin will go higher in five years.
These two cryptos attract the most attention
The volatility witnessed in 2022 did little to deter those already investing in crypto, as 78% of advisors who currently have allocations in client accounts plan to hedge or increase that risk in 2023. When it comes to the products advisors are most interested in allocating in 2023, crypto stock ETFs holding multiple crypto shares were the top choice (25%), followed by individual crypto assets such as Bitcoin (17%), diversified crypto asset funds (1%). 10) and individual crypto stocks (4%).
When broken down by interests, Bitcoin and Ethereum received the most attention. Interest in the main sectors of the crypto market is fairly evenly distributed; 16 percent show interest in DeFi, 12 percent in crypto stocks, and 11 percent in Web3 and Metaverse. More than 400 financial advisors responded to the survey, including independent registered investment advisors, broker-dealer representatives, and financial planners across the US.
