Investors like Paul Tudor Jones — as well as corporations like Microstrategy (MSTR) and Tesla (TSLA) — have dipped their toes into cryptocurrency’s rise from the financial fringes to the mainstream (BTC-USD). Tim Cook, the CEO of Apple (AAPL), has joined in the fun.
Yet, in a market characterized by head-spinning price action, still-evolving regulation, and mounting fraud, some financial advisors, along with wealth managers, appear to be unable to adapt to the new era.
According to a recent survey by FinTech firm eMoney Advisor, around 38% of Americans say their money is managed by a financial advisor, while 43% say they invest in cryptocurrency. Despite the fact that digital tokens are becoming a major subject in retail and institutional investors, the data show that less than half of advisors are handling them.
Separately, according to a January poll by crypto investment manager Bitwise, 94 percent of advisors had received crypto-related inquiries from clients. However, only 15% of respondents devoted funds to digital tokens.
Despite this, Bitwise CIO Matt Hougan stated that the industry was “approaching the tipping point for mainstream crypto acceptance by financial advisors.”
The lack of a Bitcoin exchange-traded fund (ETF) explicitly related to its spot price, as well as crypto’s famed volatility, may have something to do with it.
Even while a few new futures-linked funds have found a willing audience, the Securities and Exchange Commission has yet to approve a spot ETF. A spot ETF, according to several financial experts Yahoo Finance spoke with lately, would be the best vehicle for customers.
The author and financial expert previously told Yahoo Finance that waiting exclusively for the spot ETF is quite an outdated form of thought process. He warned that waiting it out in the short run could have negative consequences for customer returns.
Except for a few things, most crypto assets aren’t regulated in any way by federal authorities such as the Securities and Exchange Commission (SEC) along with the Financial Industry Regulatory Authority (FINRA), which is a hot topic in the current discussion about crypto regulation. As a result, some advisors are hesitant to offer digital currencies to their customers, especially as cases of fraud and mischief continue to climb.
There are some reports stating that quite a few advisors are attempting to learn about cryptocurrency. According to Bitwise’s survey, some people are paying for a credential from the Digital Assets Council for Financial Professionals, which was formed by Edelman in 2018.