Las Vegas—Financial advisors across the United States are expressing a strong commitment to crypto exchange-traded funds (ETFs) and are looking to expand their investments in this area this year.
During a talk at the Exchange conference in Las Vegas, the head of research at TMX VettaFi, Todd Rosenbluth, alongside senior investment strategist Cinthia Murphy, presented findings from a survey conducted with thousands of U.S. financial advisors, highlighting that crypto conversations are “part of everybody’s dialogue today.”
The survey revealed that 57% of advisors intend to increase their allocations to crypto ETFs, while 42% expect to keep their current investments stable. A mere 1% indicated a desire to reduce their holdings.
“Last year, the prevailing sentiment was that there was a reputational risk. Today, every advisor is at least able to engage in a basic conversation about crypto,” Murphy remarked.
Although spot bitcoin ETFs received approval from the U.S. Securities and Exchange Commission (SEC) in early January 2024, following the administration’s enthusiastic support for the crypto sector, regulatory bodies such as the SEC and the Commodity Futures Trading Commission (CFTC) have shifted their stance on crypto since the start of the Trump administration. This suggests a more favorable and transparent regulatory framework.
Survey participants indicated a particular interest in crypto equity ETFs, which invest in publicly traded firms with ties to the crypto sector, including companies like Strategy (formerly MicroStrategy) and Tesla.
“Navigating this space can be challenging, which likely accounts for the popularity of crypto equities, as they may be somewhat easier to understand and grasp,” Murphy added.
Since Trump assumed office, the stock of Michael Saylor’s MSTR has surged by over 100%, enhancing the attractiveness of crypto-linked equities for both retail and institutional investors. Although MSTR shares have retreated from their record highs, the survey findings suggest ongoing interest across the market.
Spot and Multi-Token ETFs
In addition to crypto equity-linked ETFs, other types are also gaining traction among financial advisors. Approximately 22% of survey respondents expressed an intention to direct funds towards spot crypto ETFs, including those for spot bitcoin (BTC) and spot ether (ETH).
Another noteworthy group, comprising around 19% of respondents, indicated interest in multi-token crypto asset funds.
A variety of crypto ETFs are currently available on trading platforms, with many others awaiting SEC approval for future listing.
The past few months have witnessed a significant number of index-based ETFs emerging, which comprise a basket of crypto assets beyond just bitcoin and ether. Additionally, new managed funds have launched that offer downside protection against price fluctuations by allocating a portion of funds to U.S. Treasuries, for instance.
Several issuers are in the process of introducing more spot crypto ETFs, including Solana (SOL), XRP, and Litecoin (LTC), although the SEC has not yet reviewed them.
“This is a rapidly expanding field, and I highly encourage you to familiarize yourself with the experts in this domain … because developments are happening quickly, and there is much to learn,” Murphy stated.
Contributions made by Cheyenne Ligon.
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