News

Bitcoin ETFs Are Not Winning the Hearts and Minds of Financial Advisors

Published

10 months ago

7 July, 2024

Bitcoin ETFs Are Not Winning the Hearts and Minds of Financial Advisors

Omer Taha Cetin | Anadolu | Getty Images

An important thesis around Bitcoin ETFs were born out of the need for regulated funds like these for financial advisors to direct their wealthy clients to invest in bitcoin.

Nearly six months after those ETFs launched, there are few signs that advisors are clamoring for the funds. Many remain as averse to bitcoin now as they were before. That doesn’t mean ETFs have been a failed experiment, however. For one thing, bitcoin ETFs have been hailed as the most successful ETF launches in history, with BlackRock iShares Bitcoin Trust (IBIT) reaching $20 billion in assets under management this week, despite advisors staying out.

“It’s something I’m researching because I think I’ll eventually recommend it, but I’m not there yet,” Lee Baker, founder and president of Apex Financial Services in Atlanta, said in an interview. “For me and other advisors, if we get more track records, it increases the likelihood that it will end up in clients’ portfolios.”

CNBC spoke with a dozen members of CNBC Advisory Councilwhich includes Baker, to find out why so many financial planners are still against bitcoin and bitcoin ETFs, and what might change their minds. It boils down to two main things: time in the market and regulatory compliance.

“When [bitcoin] becomes more regulated, you’ll see more adoption,” said Ted Jenkin, founder and CEO of oXYGen Financial in Atlanta. “That said, even if there’s no regulation, if over time this can prove to be a stable asset like a technology company would be, because my view on this is that this is early technology rather than money, you’ll see more adoption.”

Most advisors said they don’t initiate conversations or respond to client inquiries about ETFs, and most have no more than one client who has allocated to the funds. Of those advisors, some are proactively educating themselves about bitcoin investing, while others, often those with older, more traditional, and conservative client bases, are more dismissive.

Some of these advisors work with younger clients who have a higher risk appetite and longer investment horizon. They say their clients were already interested and educated about cryptocurrency exposure before this year and that the arrival of ETFs hasn’t motivated them to jump in.

Performance evaluation

At 15 years old, bitcoin is in a stage of maturity comparable to that of a teenager: it has great potential but is still very volatile. Bitcoin is up over 59% this year and about 230% from the 2022 low that was exacerbated during the FTX crash. Over the past three, five and 10 years, the cryptocurrency has gained 85%, 704% and 10,854% respectively. It has also suffered several drawdowns of 70% over the years, which not all investors have been able to stomach.

Many hope that steady flows into Bitcoin ETFs over the years will reduce this volatility, but for now it still acts as a deterrent for some.

“Financial advisors now have a way to give clients access [to bitcoin] that is safe, reliable and regulated,” said Bradley Klontz, managing principal at YMW Advisors in Boulder, Colo. “I like … that it’s a tool in our toolbox for clients who want it. I just don’t see, right now, most firms recommending it because they’re not recommending any asset class, or any asset in particular, that has that much volatility.”

Rianka Dorsainvil, co-founder and co-CEO of 2050 Wealth Partners, said that most of her clients prioritize long-term stability and growth over high-risk opportunities, and that “the relatively early stage of Bitcoin ETFs in the financial landscape and the continued volatility associated with Bitcoin” are the primary factors keeping Bitcoin ETFs out of her investment strategies.

Cathy Curtis, founder of Curtis Financial Planning in Oakland, Calif., said she doesn’t know whether bitcoin will ever become a stable asset class, but she would consider adding it to clients’ portfolios if it showed stable returns for at least 15 years.

“If it proved to be a real diversifier alongside stocks, for example, maybe,” he said. “The history of that asset hasn’t shown me that.”

Apex Financial’s Baker noted that investors have decades of software and tools available to show them how a certain percentage of a given bond, ETF or other asset in a portfolio could increase returns or volatility and more.

“As a group, we’re pretty conservative and kind of risk-averse,” Baker said. “We’re so used to putting out charts and [asking] how this thing behaved and in what types of markets: that’s pretty much how we are.”

With a few more years in the market, investors may be able to do similar modeling with bitcoin, he added, which will help advisors appreciate the funds. He also said advisors’ embrace is a matter of when, not if.

“At this point… everyone should be convinced that [bitcoin’s] here to stay, [they’re] “We just don’t understand some of the metrics in terms of how we might look at and value stocks or bonds,” he said. “We just don’t have that foundation, and that’s another reason why uptake is slow.”

“My guess is it’s going to be a slow adoption,” he added. “I wholeheartedly believe we’re going to start seeing an increase or growth in the use of an advisor somewhere in the next two to three years.”

Not regulated enough

While Bitcoin ETFs now exist in the U.S. as a regulated investment vehicle, it’s not always clear whether and when advisors can recommend them, according to Douglas Boneparth, founder and president of Bone Fide Wealth in New York City.

“A lot of this still has to do with compliance and what the broker-dealer will allow when it comes to advisors and ETF offerings,” he said. “Just because the ETF is out doesn’t mean the floodgates are open or that it’s easy for them to allocate to it.”

Jenkin said some broker-dealers have approved the purchase of bitcoin ETFs, but have limited the amount that can be purchased, while other firms do not allow advisors to sell bitcoin ETFs at all.

Some argue that this is due to cryptocurrency’s notorious reputation for fraud, scandal, and crime, a situation that is being cleaned up a little more each year, but has undoubtedly left a scar on the industry. Others point to the lack of regulation in the industry, which increases the chances of consumer complaints, potential lawsuits against broker-dealers, and potentially fines from the Financial Industry Regulatory Authority, or FINRA.

“Part of the reason this isn’t popular yet is that there are huge compliance issues within the industry,” Jenkin said. “A lot of firms are very nervous about the communications that financial advisors have with their clients about digital assets, and none of them want to have a FINRA violation.”

“Most broker-dealers are risk mitigators,” he added. “They want to enable advisors to do things for clients, but they certainly don’t want the spotlight on them to take on more risk. That’s why you see such slow adoption of this.”

Building Trust

Bitcoin and its ETFs need more time on the market to gain trust and adoption from large players like Vanguard, which said earlier this year it had no plans to offer them and would not change its position unless the asset changes to become less speculative.

“It will come,” Boneparth said of customer confidence. It will come with “more time, coming out of the early days and into the mature days. We are coming out of years of exchanges failing, it’s not a failure of Bitcoin, but it muddies the waters [and] people’s trust.”

Until then, the best position a consultant can be in is to educate their clients, he added.

“While bitcoin ETFs may fundamentally represent a less risky and more regulated way to invest in digital assets… the association with bitcoin still tends to discourage [clients],” Dorsainvil said.

Advisors are likely to be even more put off by ether ETFs, given the added complexity of that cryptocurrency’s use cases and functionality. Last week, the Securities and Exchange Commission gave the green light to U.S. exchanges to list ETF spot etherwhich many investors predict will also be successful, but perhaps only a fraction of what Bitcoin ETFs have been.

“ETFs have made everything really easy for institutions, from pensions to large funds,” Boneparth said. “That’s where we’re seeing the majority of flows going into these bitcoin ETFs. … It’s still pretty cumbersome at the retail advisor client level.”

Don’t miss this information from CNBC PRO:

Source

Up Next

Cryptocurrency Investments in Asia (BTC): Traders Seek Riches in Korea, Philippines, Hong Kong

Don't Miss

Bahamas in talks with ‘over a dozen’ cryptocurrency firms despite FTX crash

FinCrypt Staff

We are the editorial team of FinCrypt, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on FinCrypt, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

Click to comment

News

Block Investors Need More to Assess Crypto Unit’s Earnings Potential, Analysts Say — TradingView News

Published

9 months ago

11 July, 2024

FinCrypt Staff

DeFi Lending Protocol Nexo Allocates $12 Million for Ecosystem Incentives — TradingView News

Block, a payments technology company led by Jack Dorsey square could become a formidable player in the cryptocurrency mining industry, but Wall Street will need details on profit margins to gauge the positive impact of the business on earnings, analysts said.

Block signed its first large-scale cryptocurrency mining hardware pact on Wednesday, agreeing to supply its chips to bitcoin miner Core Scientific CORZbut no financial details were disclosed.

JP Morgan estimates the deal could net Block between $225 million and $300 million, but said more information will be needed to assess the hardware business’s long-term earnings potential.

“We still have a lot to learn in terms of the margins of this business, so we are hesitant to underwrite this transaction until we know more about the cadence and economics,” J.P. Morgan said.

The deal marks a major step for the payments company, which started out as “Square” in 2009 before rebranding in 2021 in a nod to its focus on crypto and blockchain technologies.

Dorsey, who co-founded and ran Twitter (now known as “X”), has long been bullish on Bitcoin. Block began investing 10% of its monthly gross profit from Bitcoin products into Bitcoin in April.

In the first quarter, nearly 9% of the company’s cash, cash equivalents, and marketable securities consisted of bitcoin.

“This development (the deal with Core Scientific) is further evidence of Block’s role as an emerging leader in the crypto hardware ecosystem,” Macquarie analysts Paul Golding and Emma Liang wrote in a note.

Analysts say similar deals to follow could further validate Block’s reputation in the industry.

But J.P. Morgan said the stock’s performance will be determined by Block’s other segments, such as Square and Cash App.

Block shares have lost nearly 17% this year.

Source

News

This Thursday’s US Consumer Price Index could be a game-changer for cryptocurrencies!

Published

9 months ago

11 July, 2024

FinCrypt Staff

This Thursday's US Consumer Price Index could be a game-changer for cryptocurrencies!

3:30 PM ▪ 4 minute read ▪ by Luc Jose A.

This Thursday, attention will be focused on the United States with the anticipated release of the Consumer Price Index (CPI). This economic indicator could trigger significant movements in the markets, especially for the U.S. dollar and cryptocurrencies. While investors remain vigilant, speculation is rife about the potential impact of these key figures.

The Consumer Price Index: The Cornerstone of the American Economy

The Consumer Price Index (CPI) is a key measure of inflation which reflects changes in the price of goods and services purchased by American households. This index is calculated monthly by the Bureau of Labor Statistics (BLS) and serves as a barometer for the cost of living. The consumer price index covers a wide range of products, including food, clothing, housing, health care, and entertainment. Economists and policy makers closely monitor this data to anticipate economic trends and adjust monetary policies accordingly.

The June CPI data is due to be released this Thursday at 2:30 p.m., and is highly anticipated by investors. The current consensus is for headline annual inflation to decline to 3.1%, from 3.3% the previous month, while core inflation is expected to remain stable at 3.4%.

THE BIGGEST EVENT THIS WEEK 🚨

The U.S. Consumer Price Index is expected to
PUBLICATION TODAY AT 8:30 AM ET.

EXPECTATIONS ARE 3.1% WHILE
LAST MONTH THE CONSUMER PRICE INDEX (CPI) WAS 3.3%

HERE ARE SOME SCENARIOS 👇

1) CPI above 3.1%

THIS WILL BE A DAMAGE TO THE MARKET
GIVEN THAT THE LAST TIME THE CPI DATA… photo.twitter.com/yudjPLPl8g

— Ash Crypto (@Ashcryptoreal) July 11, 2024

Consumer Price Index Release: What Does It Mean for the Dollar and Bitcoin?

Inflation as measured by the consumer price index is a key determinant of the value of the US dollar. If the consumer price index declines more than expected, it could reinforce expectations of a rate cut by the Federal Reserve in September, thus weakening the dollar. A weaker dollar could benefit GBP/USD, which recently broke a major resistance level, and Bitcoin, which could see its price rise due to increased demand from institutional investors.

Current forecasts suggest that headline inflation will decline to 3.1%, with core inflation holding steady at 3.4%. However, a surprise increase in the consumer price index could upset these expectations. Fed Governor Lisa Cook has mentioned the possibility of a soft landing for the economy, with inflation falling without a significant increase in unemployment, which could lead the Fed to consider rate cuts. This outlook is particularly favorable for stock markets and cryptocurrencies, including Bitcoin, which could benefit from a more accommodative monetary policy.

According to experts at 10x Research, especially their CEO Markus Thielen, Bitcoin could see a significant increase if the CPI data confirms a decline in inflation. Thielen indicated that Bitcoin could reach almost $60,000, a prediction that has already been reflected with a rise to $59,350 before the data was released.

Therefore, Thursday’s CPI data could determine the future direction of financial and cryptocurrency markets. High inflation could strengthen the US Dollarwhile a drop in inflation could pave the way for rate cuts by the Fed, thus giving a boost to Bitcoin and other digital assets.

Enhance your Cointribune experience with our Read to Earn program! Earn points for every article you read and access exclusive rewards. Sign up now and start earning rewards.

Click here to join “Read to Earn” and turn your passion for cryptocurrencies into rewards!

Avatar of Luc Jose A.

Luke Jose A.

A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I am committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, convey the latest technological innovations and put into perspective the economic and social issues of this ongoing revolution.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.

Source

News

Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Published

9 months ago

11 July, 2024

FinCrypt Staff

Crowd Expects Bitcoin Bounce Suggests Further Losses, As RCO Finance Resists Crash

Bitcoin is seeing a rebound after its recent price crash to $53,000. Other altcoins are subsequently recovering, with many cryptocurrency investors increasingly making new entries. However, Santiment warned against this hopium, suggesting that Bitcoin could extend its price losses.

As the broader market anticipates Bitcoin’s next price action, RCO Finance (RCOF) demonstrates resilience, attracting thousands of people in influxes. Read on for more details!

RCO Finance challenges the market crisis

RCO Finance (RCOF) is approaching $1 million in funding raised, amid growing interest from institutional traders seeking stability from Bitcoin’s wild price swings. While much of the broader market has seen significant price losses, RCO Finance has remained resilient, experiencing a surge in its pre-sale orders.

As a result, the project seems oblivious to the current market conditions, leading top market experts to take a deep dive into its ecosystem. They identified why RCO Finance was able to withstand the bearish pressure and its potential to hold up even stronger during the impending broader market crash.

The main reason was related to the innovative use of RCO Finance AI Trading Tools as a Robo Advisor. This tool has been integrated into RCO Finance’s cryptocurrency trading platform, offering full automation and highly accurate market forecasts to help investors make informed decisions.

Read on to learn more about this tool and other exciting features of RCO Finance!

Bitcoin Bounces Amid Impending Crash

Bitcoin is bouncing back, rallying 8% after plunging to its lowest point since February on July 5. While this rebound has triggered a bullish wave in the broader market, many cryptocurrency analysts predict it could be short-lived as Bitcoin is poised for an imminent crash toward the $50,000 zone.

On a Post X (formerly Twitter)Santiment revealed that while the crowd is anticipating a Bitcoin rally, this potential crash could trigger FUD and panic, causing average traders to wither and give up on Bitcoin. The platform noted that Bitcoin rally has historically occurred after these weak hands sold their holdings.

In particular, these cryptocurrency analysts speculate that the previous and upcoming Bitcoin crash is largely the result of bearish market psychology, as opposed to large BTC sell-offs by the German government and Mt. Gox. In particular, Ki Young Ju, founder and CEO of CryptoQuant, noticed that “the sales were rather negligible, given the overall liquidity of Bitcoin.”

Enjoy seamless investing on RCO Finance

RCO Finance is making investing easier and easier, democratizing access to high-level tools and cryptocurrency earnings that were once reserved for professional and institutional investors. It has also prioritized accessibility, allowing investors of all levels to easily navigate its features through its intuitive interface.

Additionally, they can also maintain anonymity and privacy as the platform has no KYC requirements. To build trust, the platform has instead emphasized regular smart contract audits by respected security firm SolidProof.

Performance data shows massive adoption, indicating that it is doing its job effectively. Investors can also capitalize on RCO Finance’s fast transaction speeds and incredibly low transaction fees, with leverage options up to 1000x to further optimize their portfolios and maximize returns.

Leverage RCO Finance’s pre-sale earnings

An in-depth analysis of the RCO Finance ecosystem revealed that it has strong potential to rival and surpass major cryptocurrencies in the cryptocurrency industry. With a very limited total token supply and excellent tokenomics, RCO Finance is poised to reach its target of $1 billion in market cap upon its official launch.

RCO Finance has adopted a deflationary model, strategic burn mechanisms, and a vesting schedule. However, the project encourages long-term holding by focusing on sustained growth through incredibly high staking rewards.

RCOF tokens are currently available at an altcoin price of $0.01275 in progress Pre-sale Phase 1. This is likely the lowest price these coins will ever trade at, as they are expected to increase exponentially with each new presale phase.

With RCOF expected to be $0.4 at launch, investors jumping in now can expect a Return 30x on their investment!

For more information on RCO Finance (RCOF) presale:

Visit RCO Finance Pre-sale

Join the RCO Financial Community

Disclaimer: The statements, views and opinions expressed in this article are solely those of the content provider and do not necessarily represent those of Crypto Reporter. Crypto Reporter is not responsible for the reliability, quality and accuracy of any material in this article. This article is provided for educational purposes only. Crypto Reporter is not responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Do your own research and invest at your own risk.

Source

News

Bitget Ranks Third Among Cryptocurrency Exchanges by Capital Inflows in Q2

Published

9 months ago

11 July, 2024

FinCrypt Staff

Although Bitget is not the largest cryptocurrency exchange in terms of total volumes, it closed a favorable quarter. From April to June, the platform ranked third in net capital inflows and showed the strongest growth in market share compared to its competitors.

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

The exchange has seen a surge in user funds, with Bitcoin (BTC), Tether (USDT), and Ethereum (ETH) rising 73%, 80%, and 153%, respectively, in the first six months of the year. This growth coincided with adding 2.9 million new users to the platform.

This has positioned Bitget among the top exchanges with the highest positive net inflows in the last quarter. Only Binance, which remains the market leader, and Bitfinex have performed better in this category.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

Bitget’s spot trading volume has also seen a visible increase, going from $28 billion in Q1 to $32 billion in Q2, marking an increase of over 10%. The platform’s monthly visitors have reached 10 million. Although its volumes are increasing, Bitget still does not rank among the top 10 cryptocurrency exchanges in terms of spot trading.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming more and more intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

Gracy Chen, CEO of Bitget, commented on the quarterly performance, saying, “Q2 2024 was a pivotal period for Bitget. Our collaboration with Turkish athletes, along with significant growth in users and website traffic, is part of our global expansion.”

In an effort to expand its global presence, Bitget has partnered with three Turkish national athletes as part of its #MakeItCount campaign, starring Lionel Messi. The deal with the famous footballer It was signed in Februaryto build brand presence in Latin America.

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

The exchange introduced two new initial token listing products, PoolX and Pre-market, which collectively launched over 100 projects. Additionally, Bitget’s native token, BGB, was recognized as the best-performing centralized exchange token in June and was ranked among the top 10 cryptocurrencies by Forbes.

In its latest move, the cryptocurrency exchange aimed to become a regulated player in IndiaThe announcement comes as the world’s most populous democracy grapples with the complexities of integrating cryptocurrencies into its financial ecosystem.

Even recently,
Bitget Wallet Announced a joint investment with cryptocurrency investment firm Foresight X in Tomarket, a decentralized trading platform. This initiative targets emerging asset classes and aims to expand the portfolio’s services beyond traditional decentralized exchanges (DEXs).

In the second quarter, investors moved $700 million into Bitget, and activity on the platform increased by nearly 50%.

According to CCData’s latest H2 Outlook Report, the exchange also recorded the highest market share growth among centralized exchanges, increasing 38.4% from H2 2023 to H1 2024.

The changes taking place in the centralized cryptocurrency exchange market show that competition is becoming increasingly intenseAn example of this is the recent surge in popularity of Bybit, which has become the second largest exchange in terms of spot trading volumes.

Sports Sponsorships and New Products

Gracy Chen, Source: LinkedIn

The exchange also launched a $20 million TON Ecosystem Fund in partnership with Foresight Ventures to support early-stage projects on The Open Network.

Source