What to know:
- A majority of U.S. financial advisors are planning to increase their investments in crypto exchange-traded funds (ETFs) this year, with 57% intending to raise their allocations and only 1% planning to decrease them.
- Advisors are particularly interested in crypto equity ETFs, which invest in publicly traded companies with exposure to the crypto industry, such as Strategy or Tesla.
- 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.
Las Vegas—Financial advisors in the U.S. are committed to crypto exchange-traded funds (ETFs) and are ready to increase their holdings this year.
During a presentation at the Exchange conference in Las Vegas, TMX VettaFi head of research Todd Rosenbluth and senior investment strategist Cinthia Murphy presented results of a survey sent to thousands of financial advisors in the U.S., arguing that crypto is “part of everybody’s conversation today.”
The results showed that 57% of advisors plan on increasing their allocations into crypto ETFs, while 42% will likely maintain their position. Only 1%, practically no one, wants to decrease their position.
“I think last year the message was it’s a reputational risk. Today, there’s no advisor that can’t at least hold a basic conversation in crypto,” Murphy said.
Though the U.S. Securities and Exchange Commission (SEC) approved spot bitcoin ETFs in January 2024, a year before U.S. President Donald Trump took office, the new administration’s enthusiastic embrace of the crypto industry has likely buoyed its wider institutional adoption. Regulators, including the SEC and the Commodity Futures Trading Commission (CFTC), have reversed course on crypto since the start of the Trump presidency, signaling a friendlier and clearer regulatory approach.
Respondents said that they’re particularly interested in crypto equity ETFs, which are funds that invest in publicly traded companies with exposure to the crypto industry, such as Strategy (formerly MicroStrategy) or Tesla.
“You can’t keep up with the space which I think explains why crypto equity has been popular because it’s maybe a little easier to understand and put your fingers around it," Murphy added.
Since Trump took the Oval Office, Michael Saylor's MSTR stock has seen a more than 100% rally, making crypto-linked equities more lucrative to both retail and institutional investors. MSTR shares have pared some of their gains since hitting all-time highs; however, the survey results seem to suggest that it is still drawing interest from all parts of the market.
Spot and multi-token ETFs
Crypto equity-linked ETFs aren't the only ones gaining momentum with financial advisors. About 22% of the survey respondents said they’re looking to allocate capital to spot crypto ETFs, such as the spot bitcoin (BTC) or spot ether (ETH) ETFs.
The third largest group, which about 19% of respondents said they were interested in, was crypto asset funds that hold multiple tokens.
There are numerous crypto ETFs trading on exchanges, with several more in the process of receiving approval from the SEC to be listed in the future.
The past few months have seen a particularly large number of index-based ETFs, meaning they hold a basket of crypto assets that go behind bitcoin and ether. Other launches have included managed funds that provide downside protection for price volatility by allocating a percentage in U.S. Treasuries, for example.
Several issuers have filed to bring further spot crypto ETFs, including Solana (SOL), XRP and Litecoin (LTC), to the market, but the SEC has yet to review them.
“This is a space that’s only growing, and I highly recommend that you get to know the experts in the space … because this is moving fast, and there’s a lot to learn,” Murphy said.
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