According to a Nasdaq survey, financial advisors who have been experimenting with crypto investments have no plans to abandon the asset class and even support spot crypto ETF.
72% of 500 financial advisors surveyed said they would be more likely to invest their clients’ assets in crypto-based products should a spot crypto ETF be approved.
In Brief:
- About a third of respondents think that the SEC will approve a spot ETF this year.
- A majority of 86 percent of financial advisors intend to increase their crypto allocation in their portfolio.
- Almost 69 percent of surveyed advisors will consider using an index fund for broad crypto exposure.
However, according to the survey, 31 percent believe that spot ETF prospects will fail in 2022, while 38 percent believe that the U.S. Securities and Exchange Commission (SEC) will approve a spot ETF this year.
This debate on whether it will be approved is for a reason. The SEC has rejected every submission for a spot ETF. A week back, it again rejected the application for Bitcoin ETF put forward by Ark Investment Management and 21Shares.
86 percent of financial advisors indicated they expected to expand their allocations in crypto products within a year, 50 percent had investments in ETFs connected to Bitcoin (BTC) futures, and another 28 percent intend to use them within a year.
None of the advisors who already have a portion of their portfolio in crypto planned to decrease it over the next year.
According to the survey, crypto adoption is highest among Registered Investment Advisors (RIAs), with a third of them using crypto assets in their client’s portfolio, and 49 percent of RIAs share that restrictions are a barrier to crypto investing.
Only 40 percent of advisors who are already invested or considering it, were thinking about investing in individual digital assets. 69 percent of those have said they will consider using an index fund for broad crypto exposure.
The “8 Acre Perspective” survey by Nasdaq reveals that 10 percent of advisors report being very knowledgeable about crypto, while almost all of them express interest in learning more about crypto and digital assets.
Nasdaq’s Jake Rapaport, Head of Digital Asset Index Research, stated that financial advisors will look for an institutional solution to the crypto question that is now dominating client conversations saying, “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.”
Surprisingly, only 7 percent of advisors said that a client’s digital asset strategy should be considered in terms of ESG footprint.
“We expect ESG and crypto considerations to converge as investors continue to direct assets into both,” said Rapaport.
