More than half of financial advisors in the U.S. are too spooked by regulatory uncertainty to initiate or expand their cryptocurrency investments, a new study by Bitwise Asset Management found.
The annual survey, released Tuesday, asked 415 advisors a range of questions on their crypto sentiments, including where they think the market is going, how their clients approach crypto and what it would take for them to invest more in the space. Bitwise found advisors are increasingly bullish on bitcoin’s future but hesitant to invest in it – for their clients or themselves.
Bitwise conducted the survey in December.
Only 6 percent of respondents currently invest clients’ funds in crypto assets, and the holdouts largely plan to continue avoiding crypto in 2020; 55 percent said they will “probably” or “definitely” not invest in crypto this year, while only 7 percent said they “probably” or “definitely” will.
The survey found a notable slice of fence-sitters, too: 38 percent are “unsure” what they’ll do this year, which is significant, said Matt Hougan, Bitwise’s global head of research, who conducted the survey.
“Advisors are intrigued by crypto’s proven history of delivering uncorrelated returns or high returns,” Hougan said. However, many continue to balk at investing, largely because of regulatory uncertainty and questions of access.
Fifty-six percent of respondents said “regulatory concerns” are preventing them from embracing crypto assets. This is despite what Bitwise describes as “significant progress” in the crypto regulatory space in 2019, including action by New York’s Department of Financial Services and steps toward a regulated bitcoin exchange-traded fund.
Respondents are looking at the regulatory landscape. According to the 2019 figures, 42 percent indicated regulation was their top concern, while, looking ahead, this year a majority, or 58 percent, said “better regulation” could spur them to invest.
Hougan said even…