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Half of advisors will recommend cryptocurrencies in the next 12 months
Half of advisors plan to recommend cryptocurrency investments to their clients within the next 12 months, according to a March survey conducted by the Digital Assets Council of Financial Professionals, the organization that connects the financial services industry with digital asset communities.
Thirty-five percent of advisors plan to start advising cryptocurrencies within six months, up 70% from a December 2023 survey. Franklin Templeton Digital Assets sponsored the survey.
“These latest survey results clearly show that financial advisors are actively engaging with cryptocurrencies at an unprecedented level, thanks both to launch of spot ETFs on bitcoinwhich makes investing in bitcoin easier than ever and the rapid increase in the price of bitcoin over the past 18 months,” DACFP founder Ric Edelman wrote in an email.
He added that advisors who do not incorporate cryptocurrencies into client portfolios are not maximizing their investment potential.
Of the advisors who asked their clients if they owned cryptocurrencies, 92% had some clients who had already invested. Additionally, 39% of advisors said that between 10% and 49% of clients own digital assets.
However, in March, only 34% of advisors surveyed recommended cryptocurrencies to their clients, likely because firms need more time to incorporate new guidance on the matter. Spot Bitcoin ETF, suggested the DACFP. In December 2023, the share of advisors recommending cryptocurrencies was 59%.
Numerous advisors (31%) recommend clients allocate 2% of their portfolios to cryptocurrencies, another 19% recommend a 5% allocation, and 15% of advisors recommend a 1% allocation. Another 8% of advisors recommend allocating between 10% and 14%.
Among advisors who do not recommend cryptocurrencies today but plan to begin doing so in the future, 28% believe the ideal portfolio allocation is 5%. Another 23% of advisors said they would recommend an allocation of 1%, 15% said it should be 2%, while another 15% believe the ideal allocation is between 2.5% and 3%.
The DACFP based its March survey results on responses from 272 professionals. Financial advisors working at independent RIA firms made up 71% of respondents, while 19% of respondents worked at brokerage firms, 2% at wirehouses, and the remainder at other types of firms in the financial services industry. Most (65%) work with clients with assets between $500,000 and $3.5 million. 86% of respondents had more than 10 years of industry experience.