The cryptocurrency market has witnessed a significant surge in institutional interest, with a recent finance summit revealing that 70% of advisors are now invested in crypto. This marks a substantial increase from previous years, where only 10-20% of advisors showed interest in the asset class.

Growing Institutional Adoption

The trend of institutional investors pouring funds into crypto is gaining momentum, with the launch of Bitcoin and Ethereum exchange-traded funds (ETFs) in the US, Hong Kong, and Australia. In the US, pension funds and fund managers have begun allocating into Bitcoin through these ETFs, while banks are increasingly offering crypto custody services.

Advisors Leading the Way

According to Matt Hougan, Chief Investment Officer at Bitwise, the trend of institutional and high-net-worth individuals investing in crypto is just getting started. Hougan recently spoke at the Barron’s Top 100 Summit, where he asked the audience of financial advisors about their crypto investments. The response was overwhelming, with almost every hand in the room raised, indicating that at least 70% of the advisors in attendance were invested in crypto.

Client Allocation to Follow

While advisors are leading the way in crypto adoption, client allocation is lagging behind. Hougan notes that advisors typically allocate to crypto in their personal accounts first, with client allocations following 6-12 months later. This is because many advisors work for broker-dealers that do not currently allow allocating client funds into spot Bitcoin ETFs.

A Shift in Traditional Finance

The growing interest in crypto among institutional investors and financial advisors marks a significant shift in traditional finance. As experts in traditional finance begin to make a move towards the crypto space, interest is spreading from there. Hougan believes that this trend will continue, with client adoption following suit.

Key Takeaways

• Institutional interest in crypto is on the rise, with 70% of advisors invested in the asset class.
• Client allocation is lagging behind, but is expected to follow 6-12 months after advisor allocation.
• The trend of institutional investors pouring funds into crypto is gaining momentum, with the launch of Bitcoin and Ethereum ETFs in the US, Hong Kong, and Australia.
• A shift in traditional finance is underway, with experts in traditional finance beginning to make a move towards the crypto space.

What’s Next?

As institutional interest in crypto continues to grow, it’s likely that client adoption will follow. With the launch of more crypto ETFs and the increasing availability of crypto custody services, the barriers to entry for institutional investors are decreasing. As the trend of institutional adoption continues, it’s likely that the crypto market will experience significant growth and increased mainstream acceptance.