Why Many Financial Experts Are Still At Odds With Cryptocurrency

According to The Wall Street Journal, 85% of financial advisors are not investing in cryptocurrencies for clients. It will be difficult for them to disregard digital currencies moving forward, however.

In a survey conducted by Bitwise Asset Management, 600 financial advisors were asked a plethora of questions regarding crypto and how they are used in client portfolios. The survey showed that client interest in cryptocurrencies skyrocketed, as 94% of advisors were asked questions about crypto in 2021, an increase of around 80% from the year prior. In April 2021, the IPO of Coinbase shifted both client and advisor awareness on crypto assets.

“Two years ago, just 6% of advisors were allocating to crypto in client accounts,” Chief Investment Officer for Bitwise Asset Management Matt Hougan said. “The implications are significant, as financial advisors direct the vast majority of private individual wealth in America. Advisor engagement in the space isn’t just growing … it’s growing at an accelerating rate.”

In an age where cryptocurrency demand is booming, why are so many experts still conflicted about the alternative asset?

According to CNBC, many evade crypto merely because their programs do not incorporate crypto as investment options. Also, many simply do not have the time it takes to understand the alternative asset market. Furthermore, a handful of these assets are yet to be regulated.

Libertas Wealth Management Group founder Adam Koos says he has “a hard time recommending [crypto] as an asset class” due to its sheer volatility and how they can lose all of their value.

European Union officials have warned cryptocurrency users that there is a risk of “losing all their invested money” and should be on alert for “misleading advertisements.” According to a statement published by the European Banking Authority, consumers “face the very real possibility of losing all their invested money if they buy these assets” in connection to the rapidly growing industry and audacious publicity of said products.

“We are approaching the tipping point for the widespread adoption of crypto by financial advisors,” Hougan added.