How Financial Advisers Are Embracing Cryptocurrencies as a Hedge Against Inflation

The Cryptocurrency Surge Among Financial Advisers

Stepping into the digital age, financial advisers are increasingly warming up to cryptocurrencies as an innovative shield against inflation. Gone are the days when the mere mention of Bitcoin would make financial professionals squirm. According to a recent survey, the number of advisers allocating funds to crypto jumped by 49% in 2020, with nearly one in ten advisers riding the digital currency wave. Talk about a dramatic pivot!

Survey Insights: A Sea Change in Attitudes

The Bitwise/ETF Trends 2021 Benchmark Survey reveals that in 2020, 9.4% of financial advisers indicated they were investing in cryptocurrencies. This number is significant when you consider it was just a fledgling 6.3% the year before. Even more intriguing are the advisers sitting on the fence: 17% of those not currently dabbling in crypto expressed strong interest in gaining exposure this year. Yes, folks, it seems the tide is turning!

Inflation: The Uninvited Guest

As inflation fears loom large, it’s not surprising that advisers are turning to crypto, with 25% citing it as a hedge against rising prices, a significant jump from just 9% the year prior. With classic assets failing to keep pace with inflation, it’s only natural for advisers to look towards the digital frontier for potential high returns. Just remember, where there’s inflation, there’s opportunity – or at least that’s what they tell us!

Growth of Institutional Interest in Bitcoin

Institutions are slowly but surely getting their act together when it comes to Bitcoin. Goldman Sachs’ Jeff Currie claims that institutional adoption could be the catalyst to Bitcoin’s maturity. As more investors swap traditional holdings for digital gold, the narrative surrounding crypto is shifting, creating a marketplace where financial advisers want to play in. The devaluation of the dollar isn’t doing them any favors either, as the expected multitrillion-dollar stimulus plan may lead many to abandon ship from conventional financial systems.

Bitwise: Riding the Crypto Wave

In 2020, Bitwise saw its assets under management skyrocket to $500 million, a fivefold increase in just a couple of months. This staggering growth speaks volumes about the burgeoning demand from investment professionals. Hedge funds, corporations, and advisers are all piling onto the crypto bandwagon, recognizing that in this brave new financial world, it pays to be flexible and open-minded.