- More financial advisors in the US allocated to cryptocurrencies in the past year.
- Interest in crypto is also rising amongst these advisors in 2021.
Unarguably, the digital currencies market had an outstanding performance and growth in the just-concluded year. After the market crash in March, especially, cryptocurrencies like Bitcoin (BTC) became very attractive to both institutional and retail investors, for some reasons that include the exponential growth in price and inflation hedge. Also, Bitcoin attracted many corporate investors last year, with the leader being MicroStrategy, which has allocated about $1 billion in BTC.
Still on the trend, a recent survey conducted by Bitwise, a leading cryptocurrency index funds provider, showed that more financial advisors in the United States allocated to digital currencies in 2020 than the previous year.
US financial advisors are going for cryptos
The survey was participated by almost 1,000 financial advisors across the United States. According to the report, there was nearly a 50 percent increment in the number of advisors in the country that allocated funds to digital currencies in their clients’ portfolios. Meanwhile, the percentage increased from 6.3 percent to 9.4 percent in 2020, compared to the previous year. This signals a growing level of confidence in cryptocurrencies among the advisors in the country.
Also, there is already a growing interest in cryptocurrency by the advisors this year. Following the survey report, two percent of the respondents, not currently allocating to digital currencies, said they would “definitely” do so this year, while 15 percent said it’s under probability. So, a combined 17 percent of financial advisors in the US may allocate their client’s funds in cryptocurrencies.
What’s behind the rising interest?
The uncorrelated returns with cryptocurrencies and “inflation hedging” are the two major factors behind the growing interest of the advisors in crypto, according to the report. Also, about 81 percent admitted that their clients have been asking questions regarding cryptocurrency. Fifteen percent, meanwhile, are confident that the price of the leading cryptocurrency, Bitcoin (BTC), will exceed $100,000 in the next five years.