Crypto Trends 2021 Benchmark Survey

This is the annual survey for the crypto industry, published by ‘Bitwise’ and ‘ETF trends’ and released each January.

The Bitwise/ETF Trends 2021 Benchmark Survey

Overall, the 2021 survey’s findings show a significant rise in interest and allocations to crypto among financial advisors. Many advisors are still in the learning phase and are waiting for key regulatory developments (such as the launch of an ETF) before investing on behalf of their clients. Note, that in 2020, legendary hedge fund managers like Stanley Druckenmiller and Paul Tudor Jones announced allocations to the crypto industry.

 

The 2021 Crypto Survey Highlights:

  • 24% of advisors said they own crypto assets in their personal portfolio, compared to 17% in the 2020 survey

  • The number of advisors allocating to crypto in client portfolios rose 49% in 2020

  • 17% of all participants who do not currently allocate to crypto say they will start an allocation in 2021, compared to 7% in 2020

  • 81% of all financial advisor report they received questions from clients on crypto in 2020, compared to 76% in 2020

  • Crypto’s low correlation to other assets is the primary reason for adding crypto to portfolios (54% of advisors completing the survey)

  • 25% of advisors in this year’s survey highlighted inflation hedging as an attractive feature of crypto (9% last year)

  • Advisors are increasingly bullish: 15% expect the price of bitcoin to exceed $100,000 within five years (4% last year)

  • 78% of surveyed advisors who have allocations to crypto in client portfolios intend to increase their clients’ allocation to crypto in the next 12 months, and 22% intend to hold steady. No advisor with client positions today reported plans to decrease or eliminate their position

  • The percentage of advisors highlighting crypto’s low correlation to other assets stayed steady at 54%

 

 

The methodology of the Bitwise/ETF Trends 2021 Benchmark

The survey elicited 994 eligible, complete responses from financial advisors (from the 415 responses received in the 2020 survey):

  • 45% of responders are Independent RIAs

  • 25% of responders are Independent broker-dealer representatives

  • 19% of responders are financial planners

  • 11% of responders are wirehouse representatives

  • The mean advisor in the survey had between $50 million and $99.99 million in assets under management

 

What is Preventing Participants from Allocating to Crypto

Advisors continue to highlight a wide variety of concerns:

  • 54% of advisors highlighting regulation as a key barrier

  • 39% worries that crypto is “too volatile”

  • 41% worries that have “no idea how to value cryptocurrencies”

  • 36% lack “easily accessible investment vehicles like ETFs or mutual funds"

  • 22% don’t feel confident talking to clients about crypto

  • 13% worries that cryptocurrencies are in a bubble

  • 12% worries that crypto assets are associated with criminal activity

  • 8% worries about a reputational risk with colleagues

  • 4% worries that cryptocurrencies are a scam

 

□ The Bitwise/ETF Trends 2021 Benchmark Survey of Financial Advisor Attitudes Toward Cryptoassets

Source: www.bitwiseinvestments.com

 

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