Bitcoin ETFs Are Hot: Why Financial Advisors Are Not Jumping In Yet

Introduction: However, most of the buying activity to date appears to have been driven by retail investors

The Bitcoin ETF has attracted huge amounts of investor funds since its launch, but it still has not reached its The target market, is financial advisory institutions with trillions of dollars in customer funds under management.

Since trading began on January 11, investors have invested in 9 new "spots" More than $20 billion has been invested in Bitcoin ETFs The floodgates for entry, especially for U.S. financial advisory firms that manage $30 trillion in client assets, are unclear whether buyers are new to cryptocurrencies or simply moving their Bitcoin holdings from exchanges to Since low-cost, easy-to-use ETFs began trading on

, investors have poured more than $20 billion into nine new spot Bitcoin ETFs and withdrawn more than $10 billion from the Grayscale Bitcoin Trust Registered investment advisors are guiding funds The flow to ETFs is very influential,

but these advisory institutions currently have limited opportunities to access Bitcoin funds

Financial management platforms only provide Bitcoin funds under non-active circumstances,

Advisors can’t actively market Bitcoin funds to clients, but can offer them to clients who request them

Billions are expected as the SEC approves exchange-traded funds that invest directly in Bitcoin for the first time Dollars are flowing into this market

According to people familiar with the matter, Morgan Stanley has been conducting due diligence on these funds and is evaluating whether to add them to its brokerage platform Some analysts said ,

Financial management platforms and financial advisors will face reputational and legal risks when it comes to approving and allocating customer assets to invest in spot Bitcoin ETFs

In the history of Bitcoin, there are exciting The bull market also had its devastating plunge, falling more than 70% in a year after peaking in November 2021

“If Bitcoin collapses and heads towards zero, these financial advisors may suffer some reputational damage

##Because customers may think that allowing such products to be sold on the platform means endorsing these products,

This This will undoubtedly expose advisors to more potential lawsuits.”

Investment advisors who charge fixed fees work according to strict client loyalty standards, which require them to put the interests of their clients before their own interests

Brokers who charge commissions When providing investment advice to clients, conflicts of interest must be reduced in accordance with the U.S. Securities and Exchange Commission’s Best Interest Regulations

Despite the approval of a spot Bitcoin ETF, U.S. SEC Chairman Gensler said, Investors should be cautious about Bitcoin and cryptocurrency-related products

The Department of Labor expressed concerns about the inclusion of cryptocurrency assets in retirement accounts, "This is not necessarily just a matter of rules, the stance of regulators can also affect companies This is also why companies are hesitant to include more cryptocurrency assets in retirement accounts. Bitcoin is "more of a speculation than an investment"

On the independent brokerage platform, the rules are not so strict. The bank only provides products for purchase and will not face major liabilities

## Asset management giant Vanguard said it does not plan to offer a Bitcoin ETF to clients or offer cryptocurrency-related products on its brokerage platform

Some financial managers say the recent price of the digital currency has Soaring, the institution received a significant increase in customer inquiries about Bitcoin investment

According to Dow Jones Market Data, Bitcoin soared to a record high on Wednesday, trading at $73,462.59. Bitcoin’s rise in 2024 has exceeded 70 %

"Most of the clients we consult don't even know there are ETFs to buy, and they want to know if they should invest in Bitcoin

and how to get exposure to Bitcoin."

Some smaller registered investment advisers can already offer these funds, and the Grayscale Bitcoin Trust ETF has fees as high as 1.5%

Carson Group, which has $34 billion in assets under management, has approved BlackRock, Fidelity Invest, Spot Bitcoin ETFs Offered by Franklin Templeton

A fund’s fees, spreads, trading volume, asset growth, custodian, shareholder base, benchmarks and trading partners are evaluated before a fund is approved

“We want to ensure that our advisors have all asset classes on hand and can properly allocate client accounts and appeal to clients of all generations.”

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