Most financial advisers are willing to invest clients’ money in cryptocurrencies. But on what condition?
According to a new Nasdaq survey, 72 per cent of financial advisers would be very likely to invest their clients’ assets in cryptocurrencies if they had access to a so-called spot ETF for crypto. However, that said, only 38 per cent of respondents believe that the US Securities and Exchange Commission (SEC) would approve such an investment product in 2022. Be that as it may, investors are indeed attracted to digital assets. We tell you more about the situation.
It is easy to explain the growing popularity of digital assets among investors. First of all, the predictions of big-name investors are contributing to it. In particular, last week MicroStrategy CEO Michael Saylor and Ark Invest CEO Cathy Wood concluded that sooner or later Bitcoin will be valued in the millions of dollars. Moreover, global investors only need to invest 2.5 percent of their portfolios in the first cryptocurrency to get there.
Who invests in digital assets
Of those surveyed, another 31 percent said the US Securities and Exchange Commission is unlikely to give the green light to spot crypto-ETFs this year. Recall that the financial regulator already approved a Bitcoin ETF last year, but it is tied to cryptocurrency futures.
The spot price of the asset is the actual price at which it is currently trading. Futures, as a financial instrument, allow you to speculate on the price of a particular cryptocurrency, commodity or other asset in the future. We wrote more about the difference between such an investment and a spot ETF in this piece.
As Jake Rapaport, head of digital asset index research at Nasdaq, points out, none of this is stopping financial experts from finding workarounds for investing in digital assets. Here’s his rejoinder, in which the expert shares his take on what’s happening.
The vast majority of advisors we interviewed plan to either start allocating funds to cryptocurrencies or increase their existing investments in them. As demand continues to grow, advisors will be looking to address the issue of cryptocurrencies, which now dominates conversations with clients.
In other words, the analyst states that there is serious interest in digital assets among investors. Obviously, it is the fixed inflation and sometimes deflationary nature of cryptocurrencies - that is, the reduction in the volume of cryptocurrency in circulation - that makes them the first thing to pay attention to. For example, Etherium experienced its first deflationary day back in September 2021, while the Avalanche network is burning through all transaction fees. This is relevant now, as inflation rates in many countries are showing a marked increase.
Expectation of cryptocurrency growth
According to Decrypt’s sources, 500 financial advisers took part in a survey conducted back last month. In total, they manage $26 trillion in assets. Almost all of the advisers are only willing to increase the share of crypto in their investment portfolios, and there are no plans for its possible reduction in the future.
That said, the crypto market could face another major collapse in the foreseeable future, according to BitMEX founder Arthur Hayes. In a recent publication, he explained that in the eyes of investors, crypto is still tied to stocks of large technology companies, which are likely to start falling rapidly due to the U.S. Federal Reserve’s policy to reduce economic stimulus, according to CryptoPotato.
As a result, Hayes’ forecast is Bitcoin at $30,000 and $2,500 per ETH by the summer. At the same time, the trader notes that his calculations are estimated according to the current situation and could easily be wrong, so there is definitely no need to focus on them when investing. Still, almost a month ago Artur considered a serious prospect in BTC against the background of the Central Bank asset blocking, and predicted the growth of the first cryptocurrency to millions of dollars.
BitMEX founder Arthur Hayes
We believe that the results of this survey confirm the serious interest of financial experts and investors in digital currencies. Although coins are predicted to face challenging times in the near future, the basic features of coins like fixed inflation and independence from governments make it necessary to look at them from a different angle. In this case, it is a clear positive for the decentralised asset sector.
Stay tuned for more developments in our Millionaire Crypto Chat. There we will discuss other important news from the blockchain industry.
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