Insights | 01.06.21
Are Advisors Investing Client Assets in Bitcoin?
Cryptocurrencies are rising in popularity in the investment industry. Observers say demand will likely soon reach the desks of financial advisors. Institutional investors are already entering the sector. A Fidelity study found that 36 percent of institutions polled invested in cryptocurrency. In addition, six out of 10 investors agreed that the asset class has a place in portfolios. However, advisors are still wary of digital assets. The main issue is that advisors don't place a lot of trust in cryptocurrencies due to their short historical record and volatility. Matt Morris, an advisor with Sanderling Finance, adds that the risks and rewards of digital assets aren't quantifiable. There is also a lack of regulatory guidance on custody that is slowing wider adoption of digital assets. Michael Caligiuri, founder and CEO of Caligiuri Financial, said, “Advisors need to be extremely clear about the risks of cryptocurrencies with clients as there could be a relatively high chance that they could lose everything. I believe Bitcoin is more of a short-term fad than a long-term sustainable asset class."
Read the full article on InvestmentNews.