Bitcoin ETFs on the rise, but advisers are skeptical
VanEck’s Bitcoin ETF has amassed $290 million in assets in its first year, but the ETF provider has said financial advisers remain skeptical of the asset.
The firm launched its Bitcoin ETF in June 2024, and one year later assets stood at $290 million.
Much of this has been driven by mass affluent investors who are investing an average $35,000, but financial professionals are still cautious about investing in the cryptocurrency.
Only one in five financial advisers have said they would invest in a bitcoin ETF, despite multiple offerings being available in the market.
As well as VanEck, bitcoin ETFs are also offered by Betashares, Global X and DigitalX, while there are also broader cryptocurrency and Ethereum ETFs.
Arian Neiron, chief executive and managing director at VanEck Asia-Pacific, said: “Bitcoin continues to push through price barriers – the most recent being the US$100,000 mark – and we think its upside potential is significant.
“But it is important to note that bitcoin’s evolution as an asset class is still in its early stages. It remains a polarising asset class, with many financial professionals considering bitcoin speculative due to its price volatility and a lack of conviction in its investment thesis. Anecdotal evidence suggests only one in five financial advisers will allocate to a bitcoin ETF.”
Neiron said the role of a bitcoin ETF in a portfolio can include as an alternative store of value through to a thematic technology play.
Previous research by CoreData found 58 per cent of advisers have never invested in cryptocurrency and have no plans to do so. In a professional capacity, just 11 per cent of advisers reported having access to crypto funds or crypto ETFs on their approved product lists, while three-quarters of advisers excluded the assets and did not advise on them.
This hesitancy is being reflected in the allocations of their clients as those crypto holders who have an existing advice relationship typically hold a smaller allocation to cryptocurrency. Over three-quarters of advised clients (77 per cent) hold less than 30 per cent of their portfolios in crypto compared to half of non-advised investors.
AUTHOR
Laura Dew
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