As the issue of regulatory approval for exchange-traded crypto funds turned from if to when, speculation mounted that a new crop of bitcoin ETFs could revitalize the slumping digital-asset market.
To an extent it has, with the first 11 Bitcoin funds seeing $13.8 billion in inflows since their approval in January, according to a new report from Cerulli Associates.
However, hardly any of that money has come from investors acting on the recommendation of their financial advisors, who as a group remain bearish on the asset class, Cerulli has found. In a survey of more than 1,500 advisors, just 2.6% of respondents say they use crypto for some clients based on their own recommendation. Another 12.1% say they discuss crypto if their client asks about it, but they won’t bring it up on their own.
A little more than 26% of advisors say they don’t discuss crypto with clients now, but plan to do so in the future. The remainder, nearly 59% of advisors, say they have no plans to discuss crypto with clients in the future, highlighting an enthusiasm gap between financial professionals and investors.
“Many have said approval of regulated products such as futures-based and spot-based digital asset ETFs was necessary for financial advisors to start using the products,” Cerulli says in its report. “Yet even with the approvals…the needle has moved only slightly in terms of advisor appetite to use or discuss cryptocurrency with their clients.”
To be sure, Cerulli’s 2024 survey shows some rise in interest among advisors in discussing crypto with clients, but only at the margins. The 2.6% who this year say they would recommend crypto to at least some clients increased from 1.2% in last year’s poll.
Similarly, the proportion of advisors who say they would be willing to discuss crypto with clients if asked increased nearly two percentage points. The proportion of respondents who say they have no plans to discuss crypto dropped about three percentage points from last year.
While the Cerulli report shows a slight uptick in advisor interest, it paints a picture of an industry either deeply skeptical of the crypto arena or barred from discussing the asset class with clients due to the rules of their firm, or both.
Surveys vary. The Cerulli findings contrast with a study published in May by the Digital Assets Council of Financial Professionals and Franklin Templeton that found 35% of advisors plan to recommend crypto in the next six months.
That survey drew on a far smaller sample size of advisors (272) and was conducted by a group that promotes crypto and sponsored by one of the asset managers. One possible explanation for the disparity is that just 2% of the advisors in the May survey worked at the national brokerages known as wirehouses, where proactively discussing crypto with clients is largely prohibited.
Cerulli says it weights its advisor survey population to properly represent all advisor channels. Advisors in the wirehouse channel accounted for 13% of all respondents in that survey. No advisor from that channel says they are recommending crypto, according to a Cerulli representative.
