Las Vegas—Financial advisors in the U.S. are increasingly committing to cryptocurrency exchange-traded funds (ETFs) and are poised to expand their allocations in 2024.
During a recent presentation at the Exchange conference in Las Vegas, TMX VettaFi’s head of research, Todd Rosenbluth, along with senior investment strategist Cinthia Murphy, shared insights from a comprehensive survey conducted among thousands of U.S. financial advisors. The findings underscore the fact that cryptocurrency has become an integral part of financial discussions, with Murphy stating, “Crypto is part of everybody’s conversation today.”
The survey revealed that 57% of advisors intend to increase their investments in crypto ETFs, while 42% are likely to maintain their current positions. Remarkably, only 1% of respondents indicated a desire to decrease their exposure.
Murphy reflected on the change in sentiment, noting, “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.” This shift has been facilitated by the U.S. Securities and Exchange Commission (SEC) approving spot bitcoin ETFs as early as January 2024. This regulatory approval, alongside the Trump administration’s favorable stance toward cryptocurrency, has contributed to a clearer and more supportive environment for institutional adoption.
Survey participants expressed particular interest in crypto equity ETFs, which invest in publicly traded companies within the crypto sector, such as Strategy (formerly MicroStrategy) and Tesla. Murphy cautioned that the complexities of the crypto space can make direct investments intimidating, stating, “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.”
Since the onset of the Trump presidency, stocks like Michael Saylor’s MSTR have seen significant gains, with MSTR experiencing a more than 100% rally. This trend makes crypto-linked equities appealing to both retail and institutional investors. Although MSTR’s stock has moderated from all-time highs, the survey confirms sustained interest across the investment spectrum.
Spot and Multi-Token ETFs
Beyond crypto equity-linked ETFs, financial advisors are eyeing other options. Approximately 22% of respondents indicated interest in spot crypto ETFs, which include spot bitcoin (BTC) and spot ether (ETH) ETFs. Furthermore, about 19% expressed interest in multi-token crypto asset funds.
A notable number of crypto ETFs are currently trading on exchanges, with several more awaiting SEC approval for listing. Recent months have seen a surge in index-based ETFs, which encompass a diversified basket of crypto assets beyond just bitcoin and ether. Some newly launched managed funds are also designed to mitigate price volatility by incorporating U.S. Treasuries into their portfolios.
Several issuers have submitted proposals to launch additional spot crypto ETFs that would feature tokens like Solana (SOL), XRP, and Litecoin (LTC), although the SEC is still in the process of reviewing these applications.
Murphy concluded with a call to action for advisors to engage with industry experts: “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.”
Cheyenne Ligon contributed to this article.
For further insights, read more about the regulatory landscape shaping the crypto industry: Crypto Regulatory Clarity Top Catalyst for Industry Growth: Coinbase & EYP Survey.
