During the Barron’s Advisor 100 Summit, a clear shift in attitude towards Bitcoin was evident among the leading financial advisors in America. Matt Hougan, Chief Investment Officer at Bitwise, shared critical insights that reflected the industry’s view on cryptocurrency, especially Bitcoin.
Hougan’s talk emphasized an engaging session that pointed to a significant increase in personal investments in Bitcoin among financial advisors.
Bitcoin is Slowly Becoming Investors’ Top Choice
In comparison to previous years, when merely 10-20% of attendees had investment exposure to cryptocurrencies, this year showcased a remarkable jump. Notably, approximately 70% reported they personally owned crypto assets.
“There’s a very sophisticated technical term that economists use for this type of yearly phenomenon: whoa,” Hougan wrote.
Read more: Who Holds the Most Bitcoin in 2024?
This transformation is significant; it demonstrates a growing interest in cryptocurrencies among professionals in finance. However, despite this personal enthusiasm, actual client allocations to Bitcoin remain rare. Many advisors encounter regulatory and institutional obstacles that prevent them from incorporating Bitcoin exchange-traded funds (ETFs) into client portfolios.
“Many of these advisors belong to broker-dealers that do not even permit them to invest in Bitcoin ETFs just yet. But that will change. One thing I’ve learned during my seven years at Bitwise is that advisors typically allocate first in their personal accounts. Client allocations usually follow within 6 to 12 months,” Hougan explained.
Additionally, other positive indicators include recent economic developments such as the Federal Reserve’s rate cut and the SEC’s approval of options on Bitcoin ETFs. These events, combined with the insights from the summit, highlight a growing confidence among finance professionals in Bitcoin as a viable investment asset.
The increase in advisors’ personal holdings of Bitcoin corresponds with the cryptocurrency’s impressive performance. Bitcoin has shot up over 50% year-to-date, trading near $64,000, showcasing heightened demand and investor interest.
The growing allure of Bitcoin and Bitcoin ETFs also reaches institutional investors. According to analyst Eric Balchunas, more than 1,000 institutional investors currently hold Bitcoin ETFs in their portfolios. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) has 661 institutional holders, with 20% of its shares owned by institutions and large advisory firms.
Furthermore, a notable shift is occurring among top US hedge funds, with 60% now owning Bitcoin ETFs, a significant rise from earlier in the year. Companies like Citadel Securities, Millennium Management, and Fortress Investment are increasing their stakes, highlighting strong institutional support for Bitcoin.
Eric Balchunas, a senior analyst at Bloomberg, emphasized the remarkable growth of Bitcoin ETFs. He forecasts a potential doubling of institutional engagement next year. Additionally, the broader acceptance of Bitcoin ETFs among registered investment advisors signals a growing institutional trust in the value of BTC.
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