Advisors allocated to crypto in client accounts near all-time high levels, while citing limited access and uncertainty as challenges, according to the fifth annual benchmark survey.
Bitwise Asset Management, the world’s leading crypto index fund manager, and VettaFi, a leading data-driven ETF platform, today released the findings of the fifth annual Bitwise/VettaFi 2023 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets. The survey found that, despite the sharp market correction of 2022, financial advisors remain highly engaged in crypto markets, with 15% allocating in client accounts and 90% receiving inbound questions from clients about the space.
Crucially, the survey also showed that a majority of advisors have clients who invest in crypto outside of their advisory relationship. One reason is access: Only 29% of advisors reported being able to access crypto in client accounts, with the rest being blocked by company policy. This presents a key opportunity for improved access to this space to enable advisors to better serve their clients.
Among the key findings:
Short-Term Bearish, Long-Term Bullish: Sixty-three percent of respondents believe that the price of bitcoin will fall this year. But 60% think it’ll be higher in five years.
Crypto Allocation Held Steady, Despite Market Volatility: Fifteen percent of advisors reported allocating to crypto in client accounts in this past year. That’s roughly even with last year’s survey (16%), and far ahead of 2021 (9%) and 2020 (6%).
Client Interest Remains Strong : Ninety percent of advisors received a question about crypto from clients last year. Despite market performance, the most common question was: “Should I consider an investment in crypto?”
Once Invested, You Tend To Stay Invested (Or Invest More): Despite market volatility, 78% of advisors who currently have an allocation in client accounts plan to either maintain or increase that exposure in 2023.
Access Is a Barrier to Adoption: Only 29% of advisors said they can buy crypto in client accounts. Among that group, 52% currently allocate on behalf of clients, showing how important access is.
A Major Business Opportunity: Fifty-nine percent of advisors said “some” or “all” of their clients were investing in crypto on their own, outside of the advisory relationship. This is a major business opportunity for advisors … and an area where advisors can help clients make smarter choices.
Crypto Equity ETFs Dominate Advisor Interest: “Crypto equity ETFs” were advisors’ top choice when asked what exposure they were most interested in allocating to in 2023.
"The survey is a reminder that crypto is one of the best business development opportunities in the financial advisor market," said Matt Hougan, Chief Investment Officer for Bitwise Asset Management. "Ninety percent of advisors report fielding questions from clients, and a majority say they have clients who invest in crypto outside the advisory relationship. 2023 is the year to bring those investments in-house."
“Advisors and their end clients continue to want to learn more about crypto investments despite the volatility incurred in 2022,” said Todd Rosenbluth, Head of Research for VettaFi. “For those with a long-term focus, interest remains high."
Over 400 financial advisors answered a series of questions on crypto assets and their use in client portfolios. Survey respondents included independent registered investment advisors, broker-dealer representatives, financial planners, and wirehouse representatives from across the U.S. This is the fifth consecutive year that Bitwise and VettaFi have partnered on the survey.READ SURVEY RESULTS
VettaFi, a data, analytics, and thought leadership company, is transforming financial services from an industry to a community—one relationship at a time. Engaging millions of investors annually, VettaFi cultivates an industry leading data-driven ETF platform, built to empower and educate the modern financial advisor and institutional investor. In addition to providing interactive online tools and research, VettaFi offers asset managers an array of indexing and digital distribution solutions to innovate and scale their businesses. For more information, visit www.vettafi.com.
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers, offering both index and active strategies across a wide array of investment vehicles. The firm is known for creating the world’s largest crypto index fund (OTCQX: BITW), a suite of crypto-focused equity and futures ETFs, and investment products that span Bitcoin, Ethereum, DeFi, and NFTs. Bitwise focuses on partnering with financial advisors and investment professionals to provide quality education and research. The team at Bitwise combines expertise in technology with decades of experience in traditional asset management and indexing, coming from firms including BlackRock, Blackstone, Meta, and Google, as well as the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and asset management executives, and has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, and The Wall Street Journal.