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2021-01-13

The rise of financial planners investing in cryptocurrency

A study released by Bitwise Asset Management, a provider of crypto index funds, found that the number of financial advisors allocating capital to crypto increased by about 50% in one year.

The survey, conducted in partnership with investment portal ETF Trends, surveyed nearly 1,000 U.S. financial advisors in December. The survey results indicate that 9.4% of client portfolios were open to crypto assets - up from 6.3% a year ago.

Of the investment advisors who had not yet assigned themselves to crypto activity, 15% said they were "likely" to invest in virtual currency in 2021, and 2% said they would "definitely" invest in the asset class this year.

Financial planners are much more likely to invest their personal wealth in crypto, with 24% saying they have already done so.

The global economic crisis caused by the coronavirus pandemic appears to be the main motivation driving financial planners to invest in crypto assets, with 54% of respondents describing "uncorrelated returns" as the main benefit of cryptocurrency exposure.

A quarter of survey participants identified "inflation hedging" as the most attractive utility of crypto, up from 9% the previous year. Client demand also appears to be significant, with 81% of advisors saying clients have asked them about crypto assets in 2020, up from 76% in 2019.