Two Bitcoin futures ETFs were approved by the US Securities and Exchange Commission last week, cementing their status as institutional investors.
This allows them to get exposure without any technical knowledge. Advisors can now allocate Bitcoin to a portion of their client portfolios.
MicroStrategy CEO Michael Saylor, a Bitcoin bull, stated that over 200,000 financial advisers in the US manage more than $100 trillion of wealth. Because they can earn fees from it, they are more likely to include BTC.
There are approximately 218,000 financial advisers in the United States managing assets in excess of $110 trillion, and as of this week they can allocate client assets to #Bitcoin via ETFs which integrate with their business model & information systems.https://t.co/Ezc7A2nW2C
— Michael Saylor
(@saylor), October 23, 2021
Green Light for Financial Advisors
The WSJ published an article last week that explored the reasons behind the bullish sentiment among financial advisors. According to Bitwise Asset Management, 81% of financial advisors said that their clients have asked about crypto investing over the past year. This indicates a strong demand.
Flourish’s head, Ben Cruikshank commented that financial advisors feel the “need to offer what clients want, even if they are uncomfortable.”
Interactive Brokers Group, an online brokerage company, has launched a new service that allows financial professionals to trade Bitcoin. Many more services will open the doors for digital assets.
The company serves as a custodian and trade facilitator, record keeper, and works for over 5,700 advisors, with assets totalling $60 billion. Advisors will be able to purchase crypto for customers, and also include it in traditional investments like stocks and bonds. These services can help advisors earn higher fees.
Bitcoin, not Futures
Anyone trying to sell one the new ETFs was warned to be cautious. These ETFs only offer futures contracts and not the asset. ProShares and Valkyrie purchase futures contracts based upon market prices. They do not hold physical BTC like Grayscale does.
The ProShares fund set a number trading volume records last week. In just two days, it became the first fund to surpass $1 billion in assets under administration. It also generated $1 billion volume in the first day.
BTC prices are still cooling off last week’s record high and were trading at $62,000 at the time this article was written. Financial advisors may be more bullish in the long-term because they are less likely sell at the speed of volatility.
Marla Brooks – Financial Analysis
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