Rianka R. Dorsainvil, CFP®
A major thesis around bitcoin ETFs was that financial advisors needed regulated funds like them to direct their wealthy clients to invest in bitcoin.
Almost six months after the launch of those ETFs, there are few signs that advisors are clamoring for the funds. Many remain just as averse to bitcoin now as they were before. That doesn’t mean the ETFs were a failed experiment, however. For one, bitcoin ETFs have been hailed as the most successful ETF launches in history, with BlackRock’s iShares Bitcoin Trust (IBIT) reaching $20 billion in assets under management this week, even with advisors sitting out.
“It’s something I’m researching because I think eventually I will recommend it, I’m just not there yet,” Lee Baker, founder and president of Apex Financial Services in Atlanta, said in an interview. “For myself and other advisors, if we get more of a track record, it increases the likelihood that it ends up in the client portfolios.”
CNBC spoke with a dozen members of CNBC’s Advisor Council, which includes Baker, to learn why so many financial planners are still down on bitcoin and bitcoin ETFs, and what could cause them to change their tune. It comes down to two main things: time in the market and regulatory compliance.
“When [bitcoin] gets more regulated, you will see more adoption,” said Ted Jenkin, founder and CEO of oXYGen Financial in Atlanta. “That being said, even if there isn’t regulation, if over time this can prove to be as stable of an asset as a technology firm would be — because my viewpoint on this is it’s early technology more than it is money — you’ll see more adoption.”
Most of the advisors said they’re neither initiating conversations nor fielding client inquiries about the ETFs – and most don’t have more than one client who has made an allocation to the funds. Of those advisors, some are proactively educating themselves about bitcoin investing, while others — often those with an older, more traditional and conservative client base — are more dismissive.
Some of these advisors work with younger clients who have a greater appetite for risk and a longer investment time horizon. They say that their clients were already interested and educated in crypto exposure before this year, and that the arrival of ETFs hasn’t motivated them to jump in.
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