Clients Trading Their Own Crypto? Advisors Say Not So Fast.
Wealth managers are getting held-away crypto assets in-house through ETFs and separately managed accounts.

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Advisors are hearing from clients that they personally manage crypto investments on exchanges like Coinbase and Binance, according to experts. In order to get a better understanding of those held-away assets and bring those investments in-house, wealth managers are increasingly diving into the crypto world through ETFs and separately managed accounts. More assets under management is always a plus, and that’s benefitting clients too.
“Clients are seeing that the price of bitcoin and ether has gone up in the past five years and are saying, ‘Hey, I should probably get these assets under my advisor’s discretion, not in this little side investment,’” said Damon Polistina, director of research at Eaglebrook Advisors, a crypto investment platform for wealth managers.
See Spot Run
Issuers like Franklin Templeton, ARK, Grayscale, and others have poured into the space to meet growing client demand for crypto ever since the debut of spot ETFs, which directly invest in cryptocurrencies as the underlying asset:
- Betterment has gotten particularly bullish on spot ETFs, telling clients this month that its existing crypto portfolios are being discontinued and replaced by a new crypto ETF portfolio.
- Just last week, BlackRock’s iShares Bitcoin Trust ETF (IBIT) attracted over $1 billion in inflows. Investments continued this week even as bitcoin’s price fell. The fund now has more than $26 billion in net assets.
- At the end of its third quarter, Morgan Stanley held $272 million worth of bitcoin ETFs in its portfolio.
“The Bitcoin ETF broadened the potential investors for cryptocurrency and legitimized it,” Polistina said.
In Crypto We Trust. The transition from crypto exchange to advisory products has been driven by ease and familiarity. It’s simpler to let a world-renowned firm like Fidelity or BlackRock manage crypto assets rather than handling that yourself, Polistina noted.
However, crypto still has a way to go before it’s considered mainstream among wealth managers. A Cerulli report indicated that roughly 14% of financial advisors are using or discussing cryptocurrency with clients, but only 2.6% are making recommendations.
“The adoption is going in the right direction, but it’s still very early innings,” Polistina said.