35% of FAs Plan to Recommend Crypto in Coming Months — Evening Brief – 06.04.24
The percentage of advisors expecting to recommend crypto investments to clients has surged by more than 70% following the Securities and Exchange Commission’s approval of 11 spot Bitcoin exchange-traded funds in January.
More than one-third (35%) of financial advisors intend to recommend digital assets to clients in the next six months, according to a recently released March survey conducted by the Digital Assets Council of Financial Professionals (DACFP) and sponsored by Franklin Templeton Digital Assets, compared with over 21% of financial advisors who said they planned to recommend crypto within six months when asked in December 2023.
However, the percentage of respondents currently advocating crypto to clients decreased significantly to 34%, down from 59% in the December poll. The report attributed the fall to firms issuing “new guidance to advisors during their due diligence process of evaluating the new spot bitcoin ETFs.”
“The availability of new spot bitcoin ETFs, combined with a roughly 50% increase in bitcoin’s price so far this year, is spurring advisors to get more involved with crypto than ever,” said DACFP founder Ric Edelman. “Advisors are racing to gain the knowledge they need to properly serve their clients.”
Among advisors who recommend an allocation to crypto, 87% are recommending that clients allocate 1% to 5% of their assets. The most recommended allocation is 2%, indicated by 31% respondents.
Advisors are also recommending that clients make greater allocations to crypto following the launch of spot bitcoin ETFs, with 85% of advisors suggesting allocations of more than 1% in March 2024 compared with only 74% in December 2023.
Following the January approvals by the SEC, crypto investing has gained traction on Wall Street, with financial firms investing $3.5 billion in spot Bitcoin ETFs as of May 9, according to a recent study.
The survey included 272 advisors, 71% of whom were independent advisors, while 65% of respondents said they served clients with $500,000 to $3.5 million in assets.
Franklin Templeton recently announced it partnered with DACFP to launch an online digital assets education course for financial professionals, called Discovering Digital Assets: Blockchain, Bitcoin and Beyond.