72% of Financial Advisors Would Invest in Spot Crypto ETFs if Made Available

A new NASDAQ survey has revealed that a significant number of financial advisors are ready to invest in spot cryptocurrency exchange-traded funds (ETFs) if they are available.

72% of F. Advisors Would Invest in Spot Crypto ETFs

In the survey, 72% of financial advisors with $26 trillion in assets under management (AUM) said they would be more likely to invest clients’ money in cryptocurrencies if a spot ETF product was made available in the United States. 

While the idea of a spot crypto ETF is cheered on, the survey shows that 38% of the financial investors find it likely that the idea will be approved in 2022. About 31% of the survey participants find it unlikely, 24% are indifferent about it and 7% are unsure.

However, this uncertainty has not discouraged financial investors from the possibility of investing their clients’ money in crypto.

Amongst advisors who are already investing in cryptocurrency, 86% of them plan to increase their crypto portfolio allocation within the next 12 months, and none plan to reduce them. The report further shows that 50% of them already use Bitcoin futures ETFs and 28% intend to start using futures ETFs within the next 12 months.

For the service rendered in investing crypto, advisors stated that their portion from the client’s total portfolio is 6%.

Regarding how the clients’ funds are being invested, 69% of advisors consider using an index fund for broad market exposure. 57% for sector-specific index funds, 52% for actively managed funds, 40% for individual digital assets and 31% for high-yield funds.

Pertaining to the use of index funds, Jake Rapaport, Head of Digital Asset Index Research, NASDAQ, said that financial advisors have been moving assets into index funds within the last 10 years. 

“As they incorporate digital assets into their investment strategies, they are expressing strong interest in a similar vehicle that can offer broad asset class exposure for their clients. […] As demands continue to surge, advisors will be looking for an institutional solution to the crypto question that now dominates client conversations,” Rapaport said.

The NASDAQ survey further revealed that investment in crypto assets is common among registered investment advisors (RIAs), showing that 34% of RIAs use crypto.

Overall, the survey shows just how much cryptocurrencies are gaining adoption in the financial market among institutional investors.

The Wait for the First U.S. Bitcoin ETF Continues

Despite increasing demand for Spot Bitcoin ETFs, the U.S. Securities and Exchange Commission (SEC) is yet to approve the first U.S. Bitcoin ETF.

Last April, leading digital asset manager Grayscale said it was still fully committed to converting its Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF. 

Investment companies like Bitwise, WisdomTree Investments, Valkyrie Digital Assets and others have filed for a Bitcoin ETF, but no action has been taken by the U.S. SEC to approve such requests.