Bitwise Survey: Only 39% of Advisors Foresee Spot Bitcoin ETF in 2024 Despite 90% Analyst Predictions
Bitwise Asset Management and VettaFi recently released the results of their sixth annual survey, shedding light on the sentiments of financial advisors regarding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in 2024. The survey, encompassing the views of over 400 financial advisors, provided a comprehensive insight into the evolving landscape of crypto investments within client portfolios.
Surprisingly, the survey revealed a stark contrast in expectations among financial advisors and industry analysts. While only 39% of the surveyed advisors anticipate the approval of a spot Bitcoin ETF in 2024, Bloomberg ETF analysts express a notably higher probability at 90%. This disparity underscores the divergent viewpoints between those immersed in the advisory sphere and market experts monitoring ETF developments.
The findings are in.
We surveyed 437 financial advisors across the nation to gauge their views on crypto assets.
Here’s what they had to say…
— Bitwise (@BitwiseInvest) January 4, 2024
A pivotal finding highlighted by the survey was the significant anticipation surrounding the potential approval of a spot Bitcoin ETF. A staggering 88% of advisors interested in Bitcoin investments indicated their intention to wait until after the ETF’s approval to initiate or increase their exposure to the cryptocurrency. This sentiment underscores the potential market impact of an approved ETF, potentially sparking increased investor interest and demand.
The survey also addressed the current limitations facing advisors regarding crypto access within client portfolios. A mere 19% of advisors disclosed their ability to purchase cryptocurrencies for their clients, indicating existing barriers to entry within the advisory realm.
Despite these barriers, advisors who have allocated funds to cryptocurrencies demonstrated a resolute commitment to maintaining or augmenting their exposure. An overwhelming 98% of these advisors expressed their intention to either sustain or amplify their current crypto allocations in 2024.
Interestingly, the survey depicted an upward trajectory in the size of crypto allocations within client portfolios. The prevalence of larger crypto allocations, constituting over 3% of portfolios, more than doubled from 22% in 2022 to 47% in 2023, signaling a growing inclination towards greater exposure to digital assets.
Client interest in cryptocurrencies remained robust, with 88% of advisors fielding inquiries from clients about these assets in the past year. However, a notable trend emerged, indicating that a considerable portion (59%) of clients were independently investing in cryptocurrencies outside the advisory relationship, signifying a substantial untapped market for advisors.
When exploring preferred investment vehicles, advisors demonstrated a keen interest in crypto equity ETFs, positioning them as the top choice for potential allocation in 2024.
The survey also underscored persistent concerns hindering greater crypto adoption within portfolios, with 64% of advisors citing regulatory uncertainty as a prominent barrier, followed closely by concerns about volatility (47%).
In terms of cryptocurrency preferences, Bitcoin retained its prominence over Ethereum among advisors, with 71% favoring Bitcoin, marking a significant uptick from the previous year’s 53%.
Matt Hougan, Bitwise CIO, emphasized the significant discrepancy between advisor expectations and ETF market analysts, highlighting the latent demand for a spot Bitcoin ETF among advisors waiting on the sidelines for its approval.
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