Donald Trump’s election as president has sent a wave of optimism through the cryptocurrency market, with Bitcoin approaching the $100,000 mark before its recent rally slowed.
Trump is expected to take a more crypto-friendly approach compared to his predecessors as he prepares to take office.
At the center of this expectation is Trump’s own foray into the crypto world. He recently signaled his commitment to supporting the crypto ecosystem by launching World Liberty Financial, a platform designed to encourage the adoption of digital currencies.
Despite these developments, traditional financial advisors remain cautious. According to an April 2024 survey by Cerulli Associates, only 2.6% of advisors actively recommend cryptocurrencies to their clients. While 12.1% are open to discussing crypto investments upon client request, a significant majority (58.9%) indicated that they have never considered using cryptocurrencies in their client portfolios.
“The No. 1 reason advisors don’t invest in crypto on behalf of their clients is because they don’t believe it’s a good fit for their client portfolio,” said Matt Apkarian, associate director in Cerulli’s product development practice.
Apkarian noted that even those who see potential in crypto are adopting a “wait and see” approach, especially as the regulatory environment for digital assets continues to evolve.
But investors are increasingly curious about cryptocurrencies. A survey conducted by Christina Lynn, a certified financial planner at Mariner Wealth Advisors, found that 90% of financial advisors have received questions about crypto from their clients.
For newcomers, exchange-traded funds (ETFs) offer a safer entry point, Lynn explained, as they reduce risks such as fraud or loss of private keys associated with direct crypto investments. However, he advised caution given the volatility of the asset class.
“It’s best not to invest any money that you think you’ll need for near-term goals,” Lynn said.
Lynn also advocated for cryptocurrencies to be considered an alternative investment, with a share of between 1% and 5% of the overall portfolio. “You don’t need to have a lot of that to go a long way,” he added.
*This is not investment advice.
