A new survey shows that more than half of the financial advisors do not expect an ETF for bitcoin to be available this year.
Some professional investors, however, recognize that this approval will ease their fears about investing in the sector.
The US Securities and Exchange Commission is set to rule on a spot bitcoin ETF proposed by Ark Invest and 21Shares — and potentially a bunch of others — by Jan. 10.
Bloomberg Intelligence’s analysts put the approval rate at 90%. They and others have cited BlackRock’s entry into the race, as well as Grayscale Investments’ August victory in court against the SEC. Others disagree and note that the SEC has shown no willingness to allow such an offer.
A survey released on Thursday found that only 39% believe an ETF for spot bitcoin will be implemented in 2024.
Almost half (nearly 400) of those who responded to the survey were registered independent investment advisors. Rest of respondents included financial planners, broker-dealer agents, institutional investors, and other investment professionals.
Overall, advisors plan to increase or maintain their current allocation of crypto. Among those who have not allocated funds to this segment yet, 8 percent are certain or likely to increase exposure in client accounts by 2024. Meanwhile, 21% will consider it.
Four out five advisors were unable or uncertain whether they would be able to purchase crypto on behalf of their clients. The half of respondents said that clearer regulation would help ease their worries, while the other 14% mentioned the launch and availability of an ETF for bitcoin spot.
In order to do so, 88% advisers who are interested in purchasing BTC will wait until the SEC has approved a bitcoin spot ETF.
“There’s a massive gap in expectations between advisers and those who monitor ETF developments for a living,” Matt Hougan, Bitwise’s Chief Investment Officer said this in a press release. “Couple that with the fact that almost 90% of advisors say they’re waiting for an ETF before making a bitcoin investment, and you see a lot of demand bubbling just below the surface.”
Bitwise and VettaFi collected the responses between Oct. 20, 2018 and Dec. 18, 2018.
Since the close of this window, many changes have been made. Firms continue to submit application amendments that indicate intended authorized participants and fees, among other things.
In October, Bitwise Research Analyst Ryan Rasmussen informed Blockworks that financial advisors are considering increasing their allocations to bitcoin because of macro-factors and expected supply and demand shocks.
Galaxy Digital research associate Charles Yu said that month in a report he expects bitcoin ETFs could see $14.4 billion of inflows in their first year of trading — increasing the asset’s price by 74% in that span.
Yu wrote in the report that assets held by RIAs (retail investment advisors), brokers and banks amount to roughly $48 billion. The flow calculation is based upon the assumption of 10% exposure of the initial $14 trillion addressable market, which has an average allocation rate of 1%.
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