Bitwise Chief Information Officer Matt Hougan highlighted the increasing interest in Bitcoin and other cryptocurrencies among financial advisors. Hougan shared these insights during his speech at the Barron’s Advisor 100 Summit, held in Palm Beach, Florida, from September 18 to 20.
Hougan discussed his approach to gauging the familiarity of his audience with cryptocurrencies. He asked the financial advisors present to raise their hands if they owned Bitcoin or any other cryptocurrency. Approximately 70% of the attendees responded affirmatively, a significant increase from his previous speeches, where only 10-20% acknowledged having crypto in their portfolios.
Faster Crypto adoption among financial advisors
Hougan noted that financial advisors are adopting Bitcoin spot ETFs faster than others. This observation came after a recent debate with Jim Bianco of Bianco Research, where Bianco suggested that adoption was slower than expected. In response, Hougan emphasized that financial advisors are more open to these new financial products than previously thought.
This year marked Hougan’s third time speaking at the Barron’s Advisor 100 Summit. He attributed his opportunity to present on the main stage to the growing popularity of Bitcoin spot ETFs, contributing to a shift in financial professionals’ attitudes towards cryptocurrency investments.
Impact of the Fed’s rate cut on the Crypto market
Another critical factor influencing the current crypto market momentum is the recent interest rate cut announced by the Federal Reserve. On September 18, the Fed confirmed a 50 basis point rate cut following its Federal Open Market Committee meeting. Jerome Powell, the Fed Chair, cited cooling employment rates and steady progress toward the 2% inflation target as reasons for the decision.
The rate cut announcement resulted in a surge in crypto prices, with Bitcoin gaining over 4%, pushing it above $62,000. Stocks related to the crypto industry, such as Coinbase (COIN), MicroStrategy (MSTR), and Marathon Digital (MARA), also experienced notable gains.
Bitcoin ETFs and Future Market Trends
Hougan also commented on the progress of Bitcoin ETFs and their role in the market. The Bitwise CIO pointed out that the U.S. Securities and Exchange Commission’s (SEC) recent approval of options trading for Bitcoin ETFs indicates a growing acceptance of these products. He also mentioned Morgan Stanley’s plans to offer Bitcoin ETFs to some clients as another positive development.
Despite this progress, Hougan noted that many financial advisors attending the summit have yet to allocate cryptocurrencies to their clients’ accounts. He attributed this to restrictions from broker-dealers that prevent them from participating in the Bitcoin ETF market. However, Hougan expressed confidence that these dynamics would change soon, with financial advisors expected to be among the first to invest in Bitcoin ETFs before offering them to their clients within the next 6 to 12 months.