Bitwise and ETF Trends surveyed 415 American financial advisers and found that increasing client interest in cryptocurrencies such as bitcoin and ethereum – along with their attractive returns – is driving more and more advisers to allocate to crypto in client portfolios.
While just 6 per cent of surveyed advisers currently had an allocation to crypto assets in client portfolios, those numbers are set to increase, 45 per cent were open to allocating to crypto in client portfolios in the next year.
Many advisers found cryptocurrency an attractive investment due to the low or uncorrelated nature of its returns when compared with other asset classes.
“That finding aligns with Bitwise’s qualitative view of how the primary narrative surrounding the investment aspects of crypto evolved in 2019,” the report reads.
“From our perspective, 2019 saw a significant uptick amongst both the mainstream media and traditional Wall Street analysts in discussing crypto as a ‘safe haven asset’ and a new form of ‘digital gold’. That messaging appears to have resonated with the financial adviser community.”
However, advisers are also highly aware of the dangers of the asset class, with 56 per cent noting the unmapped regulatory territory that cryptocurrencies occupied. Better regulation would make advisers more likely to invest in cryptocurrency (58 per cent), along with ‘better custodial solutions’ and ‘better education’ (42 per cent).
Other concerns that advisers flagged included that fact that cryptocurrencies were too volatile (43 per cent) and that they could be in a bubble (13 per cent).
However, Bitwise believes that the way ahead is clear.
“It will be interesting to see how the market evolves in the next 12 months,” the report reads.
“After all, the number of advisers explicitly looking to allocate to crypto is expected to double in the next year, and there are many highly anticipated industry developments on the horizon.”
“What’s clear is that advisers are continuing to look at the space, seeking to build their understanding, and are increasingly finding ways to serve their clients’ interests and activity in this new asset class.”
A crypto-currency business issues a press release claiming that advisers are using and are planing to use crypto-currencies for their clients…c’mon IFA can you not at least pretend to be journalists, rather than just reprinting self-serving press releases which have no basis in fact?
Tulipmania all over again, the greatest bubble the world has ever seen was in Tuilips where you could buy a Tulip(the flower) for around $2-3 million dollars in today’s money, anyone today can look back and say they where fools but in the bubble they thought they were geniuses.
The same thing is playing out with crypto’s today those speculators think they are Warren Buffet when in fact there more like Kanye West( delusional)
The one question I can never get a logical answer to is what is driving crypto’s price rises? ( We all know it’s just pure speculation but the crypto guys can never admit it)
By the way Crypto has been around for 10 years and it’s goals was to disrupt the payments system and replace national currencies, neither of those has happened the Bank for international Settlements did a study and crypto’s make up less than 0.5% of global payments.
Why does a share price rise in value? Well because of fundamentals such as the company is profitable and it’s either paying out those earnings to shareholders or reinvesting it like Apple does in new Products which will increase revenue and profitability.
This can not happen with crypto’s as they have no earnings.
So let’s look at gold that doesn’t earn income but that experiences price rises and falls. What drives those are fundamentals Gold is used in jewellery, in electronics, central banks and private investors use it as a safe haven against economic crises( throughout history gold has appreciated in times of crisis), the current output of gold mines.
Those are all fundamental reasons why golds price will fluctuate.
But why does crypto fluctuate Nobody is actually using crypto as a national currency, nobody is using crypto to make payments with, so it has no fundamental use and therefore no value.
Everyone says crypto’s are a safe haven like gold, well that’s ridiculous gold is a safe haven because it is a scarce resource that takes a long time to mine from the ground and you can not create another version of gold like you can with crypto.
There are over 100 crypto’s, so how can crypto’s be a safe haven when anyone can come along and create a new crypto, you can’t do that with Gold
If your adviser is suggesting this to you run and run fast they have no idea what they are doing.
Can someone suggest the winner of the Melbourne Cup…I have a house to remortgage and a bet to make. Has to be sure-fire…
Hopefully ASIC has a standard process to ban these ‘advisers’ from the industry. I bet the clients get a SMSF for property investment at the same time.
Tree farms and olive plantations were once considered good ‘investments’ as well.
Great idea, add substantial risk to your cash holdings, use a volatile method of stored value and give clients a potential downside risk of 50-75%. Add in regulatory and criminal risk and you have a bargain – go for it
Scary stuff…. I fear for the American public if that’s the advice they are getting. 45% with no idea how to assess risk and value…..I hope we no longer have Australian advisers that inept……
I thought an advisers job was to talk clients out of investing in junk like this?
Cant see any dealerships with bit coin related products on thier APL. Yes the US market is a lot different, as are the rules the advisers work under. To recommend bitcoin to a client at the moment, and try to keep in the COE, well good luck with that.
I’ve invested all of my clients funds in magic beans… just all you doubters wait there is real intrinsic value here