A recently conducted survey finds that the vast majority of financial advisors in the US are waiting for a spot exchange-traded fund (ETF) before they dive into crypto investments.
Published by Nasdaq, the survey took responses from 500 financial advisors in the US who were already considering investing in cryptocurrencies. Of those surveyed, 72% said they would be more likely to invest client assets in crypto if a spot ETF were offered in the US.
“Over the last decade, financial advisors have been focused on shifting assets into index funds. As they incorporate digital assets into their investment strategies, they are expressing strong interest in a similar vehicle that can offer broad asset class exposure for their clients,” said Jake Rapaport, Head of Digital Asset Index Research, Nasdaq. “The vast majority of advisors we surveyed either plan to begin allocating to crypto or increase their existing allocation to crypto. As demand continues to surge, advisors will be looking for an institutional solution to the crypto question that now dominates client conversations.”
While interest is high, the financial advisors mostly agreed that a spot crypto ETF is probably out of the picture for the time being, with only 38% responding that it would be “likely” that one would be signed off on in 2022.
The report also showed that those who are already invested in crypto have strong convictions. According to the survey, 86% plan on increasing their allocations over the next year, and 0% plan on decreasing. In that same group, 50% of them had already used Bitcoin futures ETFs and 28% planned on using them within the next year.
“On average, advisors currently or considering investing in crypto state that their ideal crypto allocation is 6% of a client’s total portfolio. Notably, some 69% of these advisors would consider using an index fund for broad exposure, followed by sector-specific index funds (57%), actively managed funds (52%), individual digital assets (40%) and high-yield funds (31%).”
Results of the survey come amid an intensifying debate over why the SEC can’t approve a spot Bitcoin ETF, with many in the crypto space strongly dissatisfied with justifications given by the US’ main regulator.
Last month, Grayscale CEO Michael Sonnenshein said that the digital asset management giant would consider filing a lawsuit against the SEC if its latest bid to convert its Bitcoin Trust to an ETF was rejected again.
“I think all options are on the table. I think certainly it’s important that between now and the end of that 240-day process which ends in early July that the SEC hears from as many investors as possible, as well as academics, policymakers…Everybody has an opportunity to weigh in on these issues, and all of that is in fact considered as the SEC weighs the issue in front of us.”