More Asset Managers Wants to Invest in Crypto ETFs for their Clients: Report

Should crypto or specifically, a Bitcoin exchange-traded Fund (ETF) that tracks the spot price of the underlying assets be approved in the United States, a large number of asset managers and investment advisors say they will be willing to invest their client’s funds into it. 

This revelation was contained in a new survey report from Nasdaq which polled 500 financial advisors in the US with 72% saying they will be more likely to dive into crypto should an ETF product be approved. Despite this readiness, the optimism that such a product will be launched is low, seeing the wave of ETF application rejections by the SEC.

The survey detailed some 86% of the respondents who currently have exposure to digital currencies plans to increase their allocations within the next 12 months. 

Poll Details

Of those polled, 50% are currently investing in at least one of the actively trading Bitcoin futures ETF in the US while 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%).

“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.”

The majority of those surveyed are more tiled towards a more conservative exposure with just 6% of the client’s networth being allocated to digital currencies. 

The trends of adoption were seen to be increased amongst Registered Investment Advisors (RIAs) when compared to Independent Broker-Dealers (IBDs). While compliance rules have been earmarked as a major hindrance to the broad adoption of crypto as attested to by 49% of the respondents.

With lots of crypto assets options around today, the number of investment advisors that places ESG as a major consideration when choosing out a portfolio for their clients is low and pegged at 7%. Proof-of-Work (PoW) coins like Bitcoin (BTC) have posed a great environmental controversy, with the most stirring calls for a ban, amongst the investing community in the past few years, and with the proliferation of Proof-of-Stake (PoS) coins, investors seem to have a viable alternative.