Why Top US Financial Advisors Are Investing in Bitcoin in 2024?

At the Barron's Advisor 100 Summit, a significant shift in Bitcoin sentiment among America's top financial advisors was evident. Bitwise Chief Investment Officer Matt Hogan delivered critical insights on the industry's stance on cryptocurrency, particularly Bitcoin.

Haugan's talk highlighted an engaging session by financial advisors that highlighted the boom in private investments in Bitcoin.

Bitcoin is gradually becoming a favorite of investors.

Compared to a few years ago when only 10-20% of attendees were exposed to cryptocurrencies, this year saw a significant increase. Specifically, nearly 70% indicated that they personally hold crypto assets.

“There is a very sophisticated technical term that economists use for this kind of year-to-year phenomenon: Heughan,” he wrote.

Read more: Who will have the most Bitcoins in 2024?

This change is significant; It reflects the deep interest in cryptocurrencies in professional finance circles. Despite this personal enthusiasm, accurate customer placement in Bitcoin is still rare. Many advisors face regulatory and institutional barriers that prevent them from including Bitcoin exchange-traded funds (ETFs) in client portfolios.

“Many of these advisors work for broker-dealers who don't even allow you to buy Bitcoin ETFs. But that will come. One thing I've learned from working at Bitwise for seven years is that advisors always allocate in their private accounts. Client allocations usually follow 6 to 12 months later,” Hugan said.

Moreover, other bullish indicators include recent economic developments such as Federal Reserve rate cuts and the SEC's approval of options on Bitcoin ETFs. These developments, along with direct observations from the summit, underscore the growing confidence among financial professionals that Bitcoin is an investment asset.

The increase in personal bitcoin ownership by advisors is consistent with the cryptocurrency's performance. Bitcoin is up more than 50% year-to-date, trading around $64,000, reflecting demand and heightened investor interest.

The growing appeal of Bitcoin and Bitcoin ETFs also extends to institutional investors. According to analyst Eric Balchunas, more than 1,000 institutional investors now hold Bitcoin ETFs on their balance sheets. In particular, iShares Bitcoin Trust (IBIT) has 661 institutional owners at BlackRock, and 20% of the shares are owned by institutions and large advisors.

Additionally, there has been a significant shift among the top hedge funds in the United States, with 60% now holding Bitcoin ETFs, up from a significant increase at the beginning of the year. Firms such as Citadel Securities, Millennium Management and Fortress Investment are raising their stakes, highlighting strong institutional support for Bitcoin.

Eric Balchunas, a senior analyst at Bloomberg, highlighted the extraordinary growth of Bitcoin ETFs. Institutional participation is predicted to double in the next year. Additionally, the widespread adoption of Bitcoin ETFs among registered investment advisors reflects a broader institutional confidence in the value of BTC.