Isabella García
Although widespread allocations to Bitcoin in client accounts may still be some time away, a growing number of financial advisors are personally investing in crypto assets, according to Bitwise CIO Matt Hougan.
In a client memo on Tuesday, Hougan noted that a “wave of the most influential people in finance are finally allocating to crypto.” He reflected on this during his keynote speech at the Barron’s Advisor 100 Summit, held in Palm Beach, Florida, last Friday.
This annual summit brings together top financial advisors in the U.S., and Hougan was invited to speak following the launch of spot Bitcoin exchange-traded funds (ETFs), including Bitwise’s BITB product earlier this year.
To gauge the sentiment in the room, Hougan asked attendees how many owned bitcoin or another crypto asset in their personal portfolios. Having posed the same question at previous summits over the past three years, Hougan recalled that responses were historically in the 10% to 20% range. However, this time he estimated that about 70% of attendees raised their hands—indicating a sharp increase in personal crypto ownership among advisors.
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“There’s a very technical term that economists use to describe this kind of year-over-year shift: whoa,” Hougan joked.
When he followed up by asking how many had allocated bitcoin in their client accounts, only a few hands remained raised. This wasn’t surprising to Hougan, as many advisors work for broker-dealers that haven’t yet been permitted to invest in spot Bitcoin ETFs.
However, Hougan shared that advisors typically begin by investing in their personal portfolios before eventually allocating to client accounts, usually within six to 12 months.
‘A Telling Sign of the Times’
Hougan pointed out several optimistic indicators in the market, such as the Federal Reserve’s recent 50 basis point interest rate cut, Morgan Stanley’s approval to offer spot Bitcoin ETFs, and the SEC’s recent approval of options on BlackRock’s Bitcoin ETF. Yet, for Hougan, the show of hands in Palm Beach was “one of the most telling signs of the times.”
“Even a small investment in bitcoin can be transformative,” Hougan explained. “Personal involvement fosters familiarity. When advisors hold and monitor bitcoin in their own portfolios, skepticism often turns into curiosity, and eventually, comfort. Once this mindset extends to their clients, the market could shift rapidly.”
