In this post:
- Bitcoin ETFs haven’t gained favor with financial advisors.
- The main issues are market timing and regulatory compliance.
- Clients prefer stability and long-term growth.
Bitcoin ETFs have not gained favor among financial advisors. The excitement around their launch has fizzled out. The main issues are market timing and regulatory compliance. Clients want stability and long-term growth.
Bitcoin, with its infamous volatility, apparently doesn’t fit the bill for most investors. Some broker-dealers have allowed the purchase of Bitcoin ETFs but limit the quantity. Other companies don’t allow advisors to sell them at all.
Financial Advisors Still Don’t Like Bitcoin
The idea behind Bitcoin ETFs was that financial advisors would use them to guide wealthy clients into Bitcoin investments. Almost six months after their debut, there’s no sign of a rush. An investigation by CNBC shows that many advisors are as wary of Bitcoin now as they were before.
The situation doesn’t mean the ETFs are a failure, though. No. Bitcoin ETFs have been some of the most successful launches in history. For example, BlackRock’s iShares Bitcoin Trust (IBIT) hit $20 billion in assets under management, even without much support from advisors.
CNBC talked to a dozen members of CNBC’s Advisor Council. They include Lee Baker, who explained why many planners are still against Bitcoin and Bitcoin ETFs. The two big reasons are time in the market and regulatory compliance. “When [Bitcoin] gets more regulated, you will see more adoption,” said Ted Jenkin, CEO of oXYGen Financial in Atlanta. He added that if Bitcoin can prove to be as stable as a technology firm over time, it will see more adoption.
Most advisors don’t talk to their clients about these ETFs, and they don’t get many inquiries about them either. Some advisors are educating themselves about Bitcoin, while others, with older and more conservative clients, dismiss it altogether. Advisors with younger clients who have a higher risk tolerance and longer investment horizons see a bit more interest. But the arrival of ETFs hasn’t changed much.
Advisors Have Long-Term Growth Concerns for Bitcoin ETFs
Rianka Dorsainvil, co-founder of 2050 Wealth Partners, said her clients prioritize stability and long-term growth. The early stage of Bitcoin ETFs and Bitcoin’s volatility keep them out of her investment strategies. Cathy Curtis, founder of Curtis Financial Planning in Oakland, California, is also skeptical.
She would consider adding Bitcoin to portfolios only if it shows stable returns over at least 15 years. “If it proved itself to be a true diversifier along equities, for example, maybe,” she said. “The history of that asset has not shown me that.”
Apex Financial’s Baker highlighted that investors have tools to show how bonds, ETFs, or other assets might enhance returns or increase volatility. Even though Bitcoin ETFs are now a regulated option in the U.S., it’s still unclear if or when advisors can recommend them.
Douglas Boneparth, founder of Bone Fide Wealth in New York City, said it depends on compliance offices and broker-dealers. “Just because the ETF came out doesn’t mean the floodgates were open,” he said. “The ability for them to allocate to it is not easy.”
