Yesterday's release of the “Bitwise/VettaFi 2024 Benchmark Survey on Financial Advisors' Attitudes Toward crypto Assets” has shed new light on the current state of bitcoin and cryptocurrency investments. He crypto-market-insights/the-bitwise-vettafi-2024-benchmark-survey” target=”_blank” rel=”noopener nofollow”>surveyAn annual affair now in its sixth year, it explores a variety of topics including advisor cryptocurrency allocations, investment vehicles, and btc price predictions, uncovering a landscape marked by persistent client interest and significant barriers.
A bitcoin ETF Isn't Priced Yet: Here's Why
One of the most surprising findings from the survey of 437 financial advisors with AUM of $1 million to more than $100 billion, conducted from October 20 to December 18, 2023, is the expectation of a timely approval of the ETF of bitcoin. Contrary to the high probability projected by Bloomberg ETF analysts, only a minority (39%) of advisors believe that a btc spot ETF will receive approval in 2024.
This outlook stands in stark contrast to broader market sentiment and highlights a notable gap in expectations. Despite this skepticism, a significant portion of advisors (88%) see the approval of a spot ETF as an important catalyst, indicating latent demand that has not yet been activated in the market. “88% of such advisors interested in purchasing btc are waiting until a spot ETF is approved,” the survey found.
The survey also brings to light a major barrier in the bitcoin market: access. Only 19% of advisors reported having the ability to purchase btc and cryptocurrencies in client accounts. This limited access underscores the challenges advisors face when incorporating crypto assets into traditional investment portfolios. A bitcoin spot ETF will change that.
A bitcoin ETF is priceless! @BitwiseInvest
39% of financial advisors believe in one place. bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin The ETF will be approved in the 24th.
88% of advisors interested in buying $btc They are waiting until a spot ETF is approved.
Currently, 19% can purchase from customer accounts.
—Jake Simmons (@realJakeSimmons) January 5, 2024
Those who have ventured into crypto appear committed, with 98% planning to maintain or increase their exposure to crypto in 2024. The survey also noted a marked increase in large cryptocurrency allocations in client portfolios, more than doubling from 22% in 2022 to 47% in 2023.
Additionally, client interest in bitcoin and cryptocurrencies remains high, as evidenced by 88% of advisors reporting cryptocurrency-related client inquiries in the past year. Additionally, a notable proportion of advisors (59%) mentioned that their clients are investing in cryptocurrencies independently, indicating significant interest in the asset class beyond the traditional scope of advice.
When it comes to preferences, advisors showed a clear lean toward cryptocurrency ETFs for their 2024 allocations. Regulatory uncertainty (64%) and volatility (47%) remain the top concerns hindering further adoption of cryptocurrencies in wallets. Interestingly, the survey revealed a strong preference for btc over ethereum among advisors, with 71% favoring the former, a considerable increase from 53% a year earlier.
Matt Hougan, CIO of Bitwise, commented on these findings, stating: “The big takeaway from these advisors this year is that, despite all the hype surrounding the potential approval of a spot bitcoin ETF, it doesn't appear to be in the cards. There is a huge gap in expectations between advisors and those who make their living monitoring ETF developments. Add to that the fact that nearly 90% of advisors say they are waiting for an ETF before making an investment in bitcoin, and you see a lot of demand bubbling just beneath the surface.”
As for market predictions, the survey revealed a cautiously optimistic outlook. More than half of respondents (52%) believe that the price of bitcoin will increase within a year, with the figure rising to 64% over a five-year horizon. However, expectations for bitcoin to surpass its all-time high are modest in the short term (9%), but increase over the next five years (38%).
At the time of publication, btc was trading at $43,687.
Featured image created with DALL·E 3, chart from TradingView.com
