Financial advisers, wirehouses set to fuel next wave of Bitcoin ETF adoption

Bloomberg ETF analyst James Seyffart believes the next phase of adoption for crypto exchange-traded funds (ETFs) will be driven by financial advisers, wirehouses, and brokers managing assets for high-net-worth individuals.

Speaking on the “Coin Stories” podcast, Seyffart outlined how these financial institutions, which oversee trillions of dollars in assets, could play a central role in expanding the market for Bitcoin ETFs.

He noted that Bitcoin (BTC) ETFs had an exceptionally strong first year in the market, surpassing many analysts’ expectations. While Bloomberg maintained a bullish outlook on the ETFs, he acknowledged that actual performance exceeded their forecasts. 

Seyffart said:

“There have been some outflows in recent weeks, but they have taken about, in a peak, just $40 billion since their launch, they have 110 billion-ish dollars in assets. IBIT is one of the most traded ETFs on a consistent regular basis, reached $50 billion in a hundred couple days, the previous record was over a thousand days. So, no matter how you slice it, they have broken every record that you can look at.”

Given this momentum, he suggested that gradually adopting Bitcoin ETFs as a portfolio allocation tool for high-net-worth clients could drive continued success.

Big players to enter

Despite big players such as BlackRock recommending a 1% to 2% BTC allocation in investment portfolios, Seyffart highlighted that “big wirehouses and huge banks” are not allowing investors to buy crypto ETFs. 

He added that wirehouses, financial advisers, and brokerage platforms control significant capital from ultra-wealthy investors, including billionaires. 

These entities influence asset allocation decisions across a broad spectrum of financial portfolios. Seyffart indicated that if these institutions begin incorporating Bitcoin ETFs as a satellite portion of their portfolios, such as 5%, it could lead to sustained growth in adoption.

In addition to institutional adoption, Seyffart noted the trend of corporations, states, and even nations adding Bitcoin to their balance sheets. This could contribute to Bitcoin’s legitimacy and stability as an asset class within traditional finance. 

However, he emphasized that increased acceptance among financial intermediaries will likely be the key driver of ETF growth.

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