Nasdaq Survey: Spot Crypto ETF Would Speed ​​Up Advisor Allocation

Nasdaq Survey: Spot Crypto ETF Would Speed ​​Up Advisor Allocation

Nearly nine in 10 financial advisors who invest in crypto expect to increase their allocations next year, according to a Nasdaq survey, although the approval of a spot crypto ETF would help accelerate further adoption.

The survey, released on Monday, collected input from 500 advisors who are currently allocating or considering crypto. While 86% plan to increase their allocations to space over the next 12 months, none plan to reduce them over this period.

“This is significant because it shows that neither advisors nor their clients feel buyer’s remorse as a result of their decisions,” Jake Rapaport, head of digital asset index research at Nasdaq, told Blockworks.

But 72% of advisors would be more likely to invest client assets in crypto if a spot ETF were offered in the United States, the survey found.

The Securities and Exchange Commission has not yet approved a product that invests directly in cryptocurrencies like Bitcoin, and 31% of respondents said they think it is unlikely such a product will be approved this year.

Analysts at Bloomberg Intelligence have said they do not expect a spot Bitcoin ETF to be approved until mid-2023.

Meanwhile, fund groups ProShares, Valkyrie Investments and VanEck launched ETFs last year that invest primarily in Bitcoin futures contracts. The SEC last week approved a Bitcoin futures ETF from asset manager Teucrium that filed under the Securities Act of 1933 – the regulation under which spot Bitcoin ETFs are filed.

Half of advisors who already invest in crypto are investing in Bitcoin futures ETFs, and 28% plan to use them in the next 12 months, Nasdaq found.

Who distributes how?

About a third of registered investment advisors (RIAs) use crypto, compared to 19% of independent broker-dealers (IBDs) and 17% of wirehouse advisors.

Advisors say they want to allocate an average of 6% of a client’s total portfolio to crypto.

About 70% would consider using an index fund for broad exposure, followed by sector-specific index funds (57%), actively managed funds (52%), individual digital assets (40%) and high yield funds (31%).

Despite this, only 10% of advisors say they are very knowledgeable about crypto. Nasdaq teamed up with asset manager Hashdex last month to launch a digital assets curriculum for financial professionals.

“There is so much room for educational growth on this topic,” Rapaport said, noting that asset managers, index providers and media publishers can all help bridge the gap. “What is less surprising is that advisors know what they want and they largely want access to passive investment products for their clients’ portfolios.”

The Nasdaq launched its crypto index in February 2021. As of March 1, it had around 67% in Bitcoin and almost 30% in Ether, as well as eight other crypto assets with less than 1%.

“We continue to believe that the Nasdaq Crypto Index simplifies access to the entire asset class by adhering to principles important to advisors and investors,” Rapaport said. “We look forward to driving further innovation in the crypto space to support all types of investors.”

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The Post Nasdaq Survey: Spot Crypto ETF Would Accelerate Adviser Allocation is not financial advice.