Crypto investors have always been bullish about bitcoin as an investment, and financial advisors have always rallied against it. And the reason was pretty genuine – cryptocurrencies are volatile and can turn fortunes around for better or worse within seconds.
But now, things have changed. Now that cryptocurrency isn’t going anywhere, financial advisors have decided to upskill themselves to learn about Bitcoin and other crypto-assets. Why? Many investors who want to pivot away from traditional stocks are attracted to the volatile thrill that the crypto market brings.
Investors are coming to investors with questions about crypto investments
If we believe the recent reports, over 49% of advisors have said that investors have come to them and have asked about crypto investments in the past six months. That percentage used to be 17% back in 2020, a time when the true potential of NFTs and cryptocurrencies wasn’t revealed to everyone.
It is a two-way street. More than 26% of financial advisors have themselves dabbled in cryptocurrencies and are saying that they will continue to do so in the next 12 months.
Over 14% of advisors recommend investing in cryptocurrencies – a massive jump from 2019-to 2020 when only 1% of the advisors are interested in crypto offerings.
The rising interest has led to the creation of new job opportunities. For instance, Onramp Invest offers crypto assets management services to financial advisors.
“People have started to realize that crypto isn’t going away,” said Tyrone Ross, CEO of Onramp investment. Journal of Financial Planning and Financial Planning Association (who gave us the percentage) collaborated with him on the survey.
The current market has explicitly shown that it is time for financial advisors to adapt. Tech-oriented investments, such as cryptocurrencies often fail to draw the interest or understanding of financial advisors.
However, now that the explanation of crypto-assets is available in simple language, more people are gravitating towards it, and so are financial advisors.
“This situation is different,” Tyrone continues, “Clients are coming to advisors now knowing more than the advisors.”
“The advisors now fear that they might look dumb in front of the clients.”
This latest knowledge gap between the current financial advisors and the customers has started a new era of upskilling. Financial advisors are not shying away from taking classes to understand the inner workings of the cryptocurrency market.
How Financial Advisors are investing in Cryptocurrencies
Although the demand for cryptocurrencies is high, financial advisors are still cautious about it. They’re likely to allocate 1 to 2% of their investments to crypto markets.
“If someone has a commitment to the strategy and willing to put a larger stake, they allocate 3 to 5% of their shares to crypto assets”, – Ross said.
The current market is mounting pressure on advisors to help investors who want to invest in both traditional and crypto assets. Advisors are now in the works of developing ways to ascertain the risk tolerance depending on how many assets the clients possess.
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Where one can learn quickly about Cryptocurrencies
The rising interest of financial advisors in cryptocurrencies has led to the emergence of several short-term courses that can provide ample information about the market.
Thankfully, these new students can look into many tips to learn about the cryptocurrency market quickly.
- The Bitcoin Whitepaper: Perhaps the most comprehensive resource is the whitepaper of the first cryptocurrency, Bitcoin. It covers all the aspects of mining, the resources needed, and how operations equate to earnings. It provides a good start for those. However, you must be somewhat aware of technical jargon because the paper is complex.
- Online Tutorials: The rise of blockchain technology has flooded the market with online tutorials. The good news is that all of them are affordable. Financial advisors can pick varying levels of courses to start learning. The instructors have designed straightforward lessons and divided them into short snippets that students of all levels can understand quickly.
Conclusion
The rapid development of blockchain technologies and cryptocurrencies has left a large intellectual gap in the expertise of current financial advisors. If they want to succeed, they must adapt to this new need and start learning as soon as possible.
Otherwise, the customers are going to leave them behind.
You can also check out our IB articles if you want to learn about bitcoins. They are comprehensive and provide ample information to start your crypto investment journey.
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