The election of Donald Trump has injected a renewed sense of optimism into the cryptocurrency market, with Bitcoin recently approaching the $100,000 mark before retracing. Trump’s anticipated pro-crypto stance, including the launch of his own crypto platform, World Liberty Financial, is fueling expectations of increased adoption of digital currencies.
This development coincides with the expansion of crypto investment options, notably the introduction of spot Bitcoin ETFs in January and, more recently, the addition of Bitcoin ETF options. These new avenues for investment are attracting attention as the crypto market evolves.
Despite the positive momentum, financial advisors remain cautious. An April survey by Cerulli Associates revealed that only 2.6% of advisors currently recommend cryptocurrency to their clients. While approximately 12.1% expressed willingness to consider crypto based on client preference, a significant 58.9% stated they do not foresee ever incorporating it into client portfolios.
Matt Apkarian, associate director at Cerulli, explained, “The No. 1 reason why advisors aren’t investing in cryptocurrency on behalf of their clients is they don’t believe it’s suitable for client portfolios.” Even among advisors open to the possibility of using crypto, a “wait-and-see” approach prevails, particularly regarding regulatory developments.
However, investor interest in cryptocurrency remains strong. Research by Christina Lynn, a certified financial planner and practice management consultant at Mariner Wealth Advisors, indicates that 90% of advisors field questions about crypto from their clients.
Lynn suggests that exchange-traded funds (ETFs) offer a suitable entry point for investors interested in exploring the crypto market. ETFs provide a degree of protection against common crypto pitfalls such as scams and the loss of private keys. Given the inherent volatility of cryptocurrencies, Lynn advises against investing funds earmarked for short-term goals.
She recommends treating cryptocurrency as an alternative investment, limiting its allocation to between 1% and 5% of an investor’s overall portfolio. “You don’t need to have a lot of this to have it go a long way,” Lynn said.
