Crypto ETFs are gaining widespread acceptance in U.S. financial planning as ‘reputational’ concerns shrink, with 57% of advisors planning to increase crypto ETF allocations this year.
Financial advisors in the U.S. are committed to investing in crypto exchange-traded funds (ETFs) and plan to increase their holdings this year. According to a survey conducted by TMX VettaFi, 57% of financial advisors intend to raise their allocations to crypto ETFs, while only 1% plan to decrease them.
A Crypto Exchange-Traded Fund (ETF) is a type of investment fund that tracks the price of a specific cryptocurrency, such as Bitcoin or Ethereum.
Unlike traditional ETFs, which track stocks or bonds, crypto ETFs allow investors to gain exposure to cryptocurrencies without directly owning them.
They are listed on major stock exchanges and can be traded like regular stocks.
Crypto ETFs provide a convenient way for institutional and individual investors to invest in the cryptocurrency market.
The interest in crypto equity ETFs is particularly high, with advisors looking to invest in publicly traded companies with exposure to the crypto industry, such as ‘Strategy or Tesla.’ These funds are seen as a way for investors to gain exposure to the crypto market without having to directly invest in cryptocurrencies themselves.
Crypto equity ETFs are exchange-traded funds that invest in companies involved in the cryptocurrency industry.
These ETFs allow investors to gain exposure to the market without directly buying cryptocurrencies.
They track a specific index or benchmark, such as the Bitcoin Investment Trust or the VanEck Vectors Crypto Industry ETF.
This type of investment is suitable for those who want to participate in the growth of the crypto market but are not comfortable with the volatility of individual cryptocurrencies.
Spot and multi-token ETFs are also gaining momentum, with 22% of advisors looking to allocate capital to spot crypto ETFs and 19% interested in crypto asset funds that hold multiple tokens. These funds offer a diversified portfolio of cryptocurrencies, providing investors with a way to spread risk and potentially increase returns.
Spot Exchange-Traded Funds (ETFs) track a specific market index, such as the S&P 500, in real-time.
They offer investors exposure to a broad range of assets without the need for individual stock picking.
Spot ETFs provide liquidity and flexibility, allowing investors to easily buy or sell shares throughout the trading day.
With low fees and transparency, spot ETFs have become a popular choice among investors seeking to diversify their portfolios.
The survey results suggest that the perception of crypto as a ‘reputational’ risk has changed among financial advisors. Last year, there was concern about the regulatory environment for crypto investments, but this year’s survey suggests that regulators have taken steps to provide clarity and guidance, making it easier for investors to get started.
The Trump administration’s enthusiasm for the crypto industry has likely contributed to this shift in perception. With the SEC approving spot bitcoin ETFs in January 2024, advisors are now more confident in their ability to invest in crypto assets.
As one advisor noted, ‘You can’t keep up with the space,’ which explains why crypto equity funds have been popular among investors. The survey results suggest that this trend is likely to continue, with more financial advisors looking to invest in crypto ETFs and other related assets.
The growth of crypto ETFs is also being driven by the launch of new index-based funds, which hold a basket of cryptocurrencies behind bitcoin and ether. Other issuers are also filing to bring further spot crypto ETFs to the market, including Solana (SOL), XRP, and Litecoin (LTC).
Overall, the survey results suggest that crypto ETFs are becoming an increasingly popular investment option among financial advisors in the U.S. As the regulatory environment continues to evolve, it’s likely that this trend will continue, with more investors looking to get in on the action.
