A Nasdaq survey found that 72% of financial advisors would invest more in crypto if a spot ETF were available in the US. However, despite this bullish stance, advisors were not hopeful the Securities and Exchange Commission would approve this product this year.
The SEC has so far chosen to put investors at unnecessary risk by consistently rejecting Spot Bitcoin ETF applications, strangely citing consumer protection concerns on each rejection.
In brief
- A Nasdaq survey found that 72% of financial advisors would invest in crypto if a US spot crypto ETF were available.
- The report showed that most advisors were bullish on crypto, with 86% saying they expected to increase their allocation over the next 12 months.
- The US SEC has rejected all applications for a spot crypto exchange-traded product, going against their mandate of protecting consumers.
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Financial Advisors Would Buy More Crypto if Spot ETFs Were Available
New data suggests that the absence of spot crypto ETFs could be what’s standing between crypto and increased institutional adoption.
According to a Nasdaq report released on Monday surveying 500 financial advisors, 72% of respondents said they’d be more likely to invest in the asset class if a spot crypto ETF was available in the United States. Unlike risky futures-based crypto ETFs, which track the price of crypto assets via expiration-based derivatives, spot ETFs hold crypto directly and can hold their positions indefinitely – forever if need be.
Many institutions have attempted to launch a spot or physically backed crypto exchange traded fund in the United States. So far, the SEC rejected every application providing little explanation and none that merit its claims about consumer protection. In fact, here are four reasons to avoid SEC-approved Bitcoin Futures ETF.
The SEC also cites immaturity of the crypto market, despite the total capitalisation reaching well over $2 trillion in recent years. To this point, Nasdaq’s new report revealed that financial advisors weren’t especially optimistic about the US seeing a spot crypto ETF any time soon. About 38% of participants said that they think it is likely that the SEC would approve such a product by year’s end, while 31% thought the opposite.
Zero Percent of Advisors plan to Decrease Crypto Allocation
Notably, the report also revealed that 86% of the advisors already invested in crypto with plans to increase exposure over the next 12 months, while 0% planed to decrease their allocation. Half of the same group said they were using Bitcoin futures ETFs to invest client’s money, with a large majority of advisors showing tendency towards index funds for broad crypto exposure.
Commenting on the report, the head of digital asset index research at Nasdaq, Jake Rapaport said that financial advisors are “expressing strong interest” in crypto-related indices. He said:
Over the last decade, financial advisors have been focused on shifting assets into index funds. As they incorporate digital assets into their investment strategies, they are expressing strong interest in a similar vehicle that can offer broad asset class exposure for their clients.
Finally, only 10% of financial advisors reported being knowledgeable about crypto, with 9% saying they felt confident in advising clients on the topic. Compliance rules and restrictions were reported by advisors as the most significant hurdle to crypto investing.
In April, Canadian Bitcoin Exchange Traded Funs like the Purpose ETF have been heavily accumulating Bitcoin as the crypto ebbs and flows versus the Dollar above $40,000.
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