Recent calamity in the cryptocurrency market aside, a variety of recent studies and surveys confirm investor interest in the asset class is at all-time highs and continues expanding.
Some of that enthusiasm and interest arrives courtesy of financial advisors. Just look at the boom experienced by spot and ethereum exchange traded funds. However, many advisors want more crypto education and are reluctant to allocate client funds directly to digital currencies. Crypto mining stocks and ETFs such as the CoinShares Valkyrie Bitcoin Miners ETF (WGMI ) can ease the burden of crypto access. And they can keep client capital engaged with a familiar asset class – equities.
A recent survey by CoinShares found that 62% of advisors are concerned about recommending direct crypto investments to clients. WGMI can assist advisors in delivering some crypto exposure for clients. And it can do this by mitigating some of the volatility associated with direct investments in digital currencies.
“Navigating these tensions is leading advisors to seek additional resources to close their own knowledge gaps on digital assets; the survey found that advisors’ fears about conflicts with both audiences are amplified when they feel they don’t have clear guidance from their own firms regarding digital assets,” according to CoinShares.
WGMI Can Be Useful to Advisors
As noted in the CoinShares survey, more than half of advisors queried are apprehensive about cryptocurrency due its reputation for volatility. Shares of crypto miners and ETFs such as WGMI aren’t perfect when it comes to reducing that turbulence because these assets are “crypto-correlated.”
However, those correlations — which cut both ways — could be indicative of ETFs like WGMI being suitable crypto proxies for a broad swath of clients and market participants. Additionally, crypto mining stocks and funds such as WGMI are likely more palatable to many advisors than directly holding crypto on behalf of clients.
“74% of respondents say the pressure to align with traditional financial goals conflicts with the push from cryptocurrency firms to make digital assets a core portfolio component,” added CoinShares. “Additionally, as clients pursue cryptocurrency investments independently, 79% of advisors believe their role is shifting towards risk management.”
WGMI’s utility could enter the spotlight at a time when advisors know crypto cannot be ignored and as they scour the universe of investment products to deliver relevant, suitable cryptocurrency exposure to clients.
“Investor interest in digital assets has been growing for more than a decade, but has been historically niche; we are now at an inflection point where mainstream adoption is a reality. Financial advisors are rapidly developing their expertise in digital assets to address potential knowledge gaps and better align with client needs,” said CoinShares CEO Jean-Marie Mognetti.
For more news, information, and analysis, visit the Crypto Channel.
