Crypto Trends 2022

The Bitwise/ETF Trends Survey is an annual survey for the crypto industry, published by ‘Bitwise’ and ‘ETF trends’ and released each January.

Bitwise/ETF Trends 2022 Benchmark Survey

Overall, the 2022 survey’s findings show a rise in crypto allocations among financial advisors. 47% of all advisors reported owning crypto assets in their personal portfolios. 72% of those invested in crypto had exposure to Bitcoin, 50% had exposure to Ethereum, 16% invested in other altcoins. Most of them are interested in investing more in the crypto industry, but 16% believe the crypto assets are in a bubble. Better regulation, better custodian solutions, and a spot-based ETF can significantly increase the appetite of advisors to buy more crypto.

 

Previous Year’s (2021) Highlights

These are some major events that happened in 2021:

  • El Salvador declared Bitcoin legal tender
  • The first-ever futures-based bitcoin ETF in the US
  • Tesla bought Bitcoin
  • China banned Bitcoin mining
  • Crypto market capitalization reached a record $3 trillion
  • Coinbase went public at a $60+ billion valuation
  • Crypto companies attracted record amounts of venture capital
  • Non-fungible tokens (NFTs) became one of the most-searched terms on Google
  • Facebook Meta and Metaverse created a massive trend, in late 2021

 

The 2022 Crypto Survey Highlights:

Do the advisors own crypto?

  • 47% of all advisors reported owning crypto assets in their personal portfolios, nearly double the rate of the prior year (24% in 2020 and 17% in 2019).
  • In terms of specific crypto assets, 72% of those invested in crypto had exposure to Bitcoin, 50% had exposure to Ethereum, 16% invested in other altcoins such as Solana or Cardano, and 54% of advisor clients had exposure to crypto equities.

What about their clients?

  • The percentage of advisors allocating to crypto in client accounts grew sharply, from 9% last year to 16% this year. An additional 14% of advisors said they will “probably” or “definitely” allocate in 2022.
  • At least two-thirds of advisor clients (67%) were investing in crypto on their own going into 2022, compared to just 36% and 35% in the previous two years’ surveys.
  • Among advisors allocating to crypto in client accounts, 80% hold crypto at a weight of 5% or less in client portfolios.
  • Every advisor who currently has an allocation in client accounts plans to either “maintain” (42%) or “increase” (58%) that exposure in 2022.
  • 94% of advisors received questions from clients about crypto in 2021, up from 81% the year before.

How do advisors see 2022?

  • 82% of advisors said they’d prefer investing in a spot Bitcoin ETF vs. a futures-based bitcoin ETF (18%).
  • 53% of respondents believe that the price of Bitcoin will top $100,000 within the next five years.
  • 45% of advisors indicated a desire to allocate to Bitcoin, 46% to crypto equities, and 41% of advisors considering an investment in ETH in 2022.
  • 16% of advisors believe crypto assets are in a bubble, compared to 6% in 2020.

 

 

What is preventing participants from allocating to Crypto?

Advisors continue to highlight a wide variety of concerns:

  • 60% of advisors cited “regulatory uncertainty” as a barrier to greater crypto adoption in portfolios, up from 52% in last year’s survey.
  • Volatility also loomed large, with 53% of respondents expressing concern in that area, compared to 38% the year before.
  • 32% cited “Lack of easily accessible investment vehicles like ETFs or mutual funds” as a barrier, compared to 35% the year before.
  • 31% of respondents expressed custody concerns/fear of hacks, compared to 29% the year before.
  • 16% of respondents believe crypto assets are in a bubble, compared to 6% in 2020.

 

What can make participants allocate more to Crypto in the future?

What can make advisors allocate more in the future:

  • 55%, better regulation
  • 46%, better custodian solutions
  • 44%, a spot-based ETF
  • 34%, less volatility

 

The methodology of the Bitwise/ETF Trends 2022 Benchmark

The survey elicited 619 eligible, complete responses from financial advisors (from the 994 responses received in the 2021 survey):

  • The mean advisor in the survey had between $25 million and $50 million in assets under management
  • 45% of responders are independent RIAs
  • 30% of responders are independent broker-dealer representatives
  • 20% of responders are financial planners
  • 4% of responders are wirehouse representatives

 

The Bitwise/ETF Trends 2022 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets

Source: www.bitwiseinvestments.com (January 2022)

 

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