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Number of financial planners investing in crypto increases by 50%

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A survey published by crypto index fund provider Bitwise Asset Management has found the number of financial advisors allocating capital toward crypto has increased by roughly 50% in one year.

The survey, conducted in partnership with investment website ETF Trends, queried nearly U.S.-based 1,000 financial advisors in December. The findings indicate that 9.4% of client portfolios were exposed to crypto assets — up from 6.3% one year ago.

Of the investment advisors who have not yet allocated to crypto, 15% stated they will “probably” invest in virtual currency during 2021, with 2% stating they will “definitely” invest in the asset class this year.

Financial planners are much more keen to invest their personal wealth in cryptocurrency, with 24% saying they have already done so.

The global economic fallout from the coronavirus pandemic appears to be the primary motivation that is driving financial planners towards crypto assets, with 54% of respondents describing “uncorrelated returns” as the principal benefit of cryptocurrency exposure.

One-quarter of survey participants described “inflation hedging” as crypto’s most-attractive utility, up from 9% the previous year. Demand from clients also appears significant, with 81% of advisers reporting that clients have queried them regarding crypto assets in 2020, up from 76% in 2019.

Despite the growth in financial advisors making allocations to crypto, Bitwise’s CIO remarked that “the survey shows it’s still early days for crypto, with less than 10% of advisors allocating today,” adding:

“At the same time, adoption and interest are growing: The survey suggests the number of advisors allocating could double or more in the year ahead.”

ETF Trends CEO Tom Lydon stated: “Financial advisors are increasingly looking for exposure to alternative assets, and interest in crypto is rising.”

The number of crypto-naysayers within the investments advisor community is also falling, with the number of respondents predicting BTC will plummet to zero dropping from 14% in 2019 to 8% last year, and then halving to just 4% this year.

Conversely, the number of advisors predicting six-figure Bitcoin prices within five years has increased from 4% to 15% in a single year.



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Grayscale holds the key to Bitcoin hitting $40K, says JPMorgan

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Grayscale Investments, the world’s largest digital-asset manager, could hold the key to Bitcoin’s (BTC) short-term price outlook, according to JPMorgan Chase. 

As Bloomberg reports, strategists led by Nikolas Panigirtzoglou believe Bitcoin could lose its luster over the short-term unless it can “break out” above $40,000. The flagship cryptocurrency breached that key level on two occasions this month, once in the lead-up to new all-time highs near $42,000 and the other just last week.

The strategists determined that the Grayscale Bitcoin Trust, which currently has $23 billion in assets under management, will play a crucial role in whether BTC returns to that level or not.

They wrote:

“The flow into the Grayscale Bitcoin Trust would likely need to sustain its US$100 million per day pace over the coming days and weeks for such a breakout to occur.”

If BTC fails to re-take $40,000, trend-following traders “could propagate the past week’s correction,” the analysts said. That means the path of least resistance could be lower.

Since breaching $20,000 in December, the Bitcoin price more than doubled in just three weeks. The digital currency has been rangebound in recent weeks as traders look for the next major catalyst.

In the meantime, Grayscale continues to exert considerable influence over the cryptocurrency market. Average weekly inflows into Grayscale’s digital-asset products reached $250.7 million in the fourth quarter, marking a new all-time high. The Bitcoin Trust generated $217.1 million in weekly inflows, on average.

As Cointelegraph reported last week, Bitcoin’s price rose sharply after Grayscale reopened its services to new investors on Jan. 13.