Advisors Are 'Allocating to Cryptocurrency' in Their Portfolios, Bitwise CIO Matt Hougan Says

Bitwise Chief Investment Officer Matt Hougan has recently highlighted a growing trend of top financial advisors “allocating to cryptocurrency” in their portfolios.

Top financial advisors are increasingly adding cryptocurrency to their portfolios, with a recent survey by Bitwise revealing that 70% of attendees at the Barron's Advisor 100 Summit now own Bitcoin or other digital assets.

This marks a significant shift compared to previous years, when only 10-20% of advisors reported personal crypto holdings. The change suggests that financial advisors are becoming more familiar with and comfortable holding digital assets, which could pave the way for broader crypto adoption in the future.

However, despite the high rate of personal crypto investments, only a small number of advisors indicated that they had allocated cryptocurrency to client portfolios.

According to Bitwise Chief Investment Officer Matt Hougan, this discrepancy is likely due to restrictions imposed by broker-dealers, who have not yet permitted direct investment in spot Bitcoin exchange-traded funds (ETFs).

Hougan noted that advisors typically allocate to their accounts first, followed by client allocations six to twelve months later. As a result, the personal crypto investments by advisors could ultimately lead to broader client adoption.

The Bitwise CIO also highlighted other positive signals in the market, such as the recent interest rate cut by the US Federal Reserve and the approval of options on BlackRock's Bitcoin ETF by the US Securities and Exchange Commission (SEC).

These developments are expected to create a more favorable environment for crypto investments in the financial advisory sector.

Hougan further discussed the impact of Bitcoin ETFs and the broader crypto adoption in the financial advisory industry. He emphasized the role of these ETFs in making digital assets more accessible to institutional investors and clients of financial advisors.

As major wirehouses like Morgan Stanley begin approving these ETFs for client portfolios, the adoption of Bitcoin and other digital assets is expected to accelerate further.

Hougan also highlighted the transformative nature of owning Bitcoin personally for financial advisors. He explained that once advisors hold Bitcoin in their portfolios, they shift from skepticism to curiosity and eventually comfort.

As more financial advisors establish personal connections with crypto assets, this familiarity may help pave the way for broader client adoption.

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