Top finance leaders are finally allocating to crypto, says Bitwise CIO

Key Takeaways

• 70% of top financial advisors now own crypto in personal portfolios.
• Client allocations to crypto typically follow 6-12 months after advisors' personal investments.

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Top financial advisors in the US are increasingly allocating to crypto assets in their portfolios, according to Bitwise CIO Matt Hougan. Speaking at Barron’s Advisor 100 Summit, Hougan observed a significant shift in crypto adoption among attendees.

In his latest memo addressed to the crypto market, Hougan reported that when asked about personal crypto holdings, approximately 70% of advisors raised their hands, a stark increase from previous years where only 10-20% indicated ownership.

“A wave of the most powerful people in finance are finally allocating to crypto. When it spreads from them to their clients, things could get interesting quickly.,” Hougan stated.

However, client account allocations remain limited, with many advisors working for broker-dealers that do not yet allow Bitcoin exchange-traded funds (ETF) purchases.

Moreover, he noted that advisors typically allocate to their accounts first, with client allocations following 6 to 12 months later.

The CIO highlighted recent developments in the crypto space in his memo, including the Fed’s first rate cut in four years, the approval of Bitcoin ETF by Morgan Stanley, and the SEC’s approval of options on BlackRock’s IBIT last week.

Hougan also emphasized the importance of personal crypto ownership in fostering familiarity and comfort with the asset class among finance professionals.

Notably, Bloomberg senior ETF analyst Eric Balchunas highlighted on Sept. 9 that Bitcoin ETFs collectively have over 1,000 institutional holders after just two periods of 13F reports.

Using IBIT as a benchmark, Balchunas pointed out that 20% of its 661 holders are institutions and large advisors, adding that he expects this percentage to reach 40% in one year.

Family offices bullish on crypto

Family offices are also bullish on crypto, with their optimism toward digital assets doubling from 8% to 17% in one year, according to Citi’s “Global Family Office 2024 Survey Report” published Sept. 20.

Interestingly, family offices prefer direct exposure to crypto, as 24% of them reported investing in digital assets through direct buys, while 18% declared investments via crypto-linked products.

Yet, most of the surveying family offices stated that they plan to derisk from crypto in the next 12 months, despite the overall bullishness registered a leap. Moreover, 73% of them

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