Roxanna Islam is the Head of Sector & Industry Research at TMX VettaFi.
, CEO of DAIM, looks at whether advisors are supporting their clients investments in crypto and, if not, where the risks lie.Many of us thought that the launch of spot crypto ETFs would help bring crypto into the mainstream and encourage adoption - particularly by closing the gap between advisors and their clients. While the spot bitcoin ETF launch in January broke records, demand for spot Ethereum ETFs has been muted.
And unlike the old-school crypto investor, newer investors may be satisfied with a simpler approach to cryptocurrency investing . Despite the fact that bitcoin and ether have two very different use cases, it is very easy to use bitcoin as a “just for fun” investment without fully diversifying their crypto allocation.
This has been reflected in net flows for crypto launches. Excluding the Grayscale Bitcoin Trust , spot bitcoin ETFs have seen $37.3 billion in net inflows since their launch in January, with net inflows for the iShares Bitcoin Trust bringing in $20.9 billion of those flows. Since their launch in July, spot ether ETFs have seen net inflows of only $2.1 billion . The highest inflows were seen in the iShares Ethereum Trust , which had only $1.
Unfortunately, there is no clear-cut answer to getting advisors more interested in this asset class. Education – not just for investors, but also focused on advisors – will be the primary solution. Education takes time but should become easier as time passes and ease acceptance among both clients and advisors.Assuming both clients and advisors are interested, there are still some barriers to investing.
These are likely the most difficult barriers to overcome because they can’t simply be solved by education, but persistent investor and advisor demand should reduce these barriers over time.Crypto ETFs have come a long way, and I still believe the industry has room to move forward. But we need to address education to encourage adoption and bridge the gap between advisors and their clients.
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