The world of traditional finance (TradFi) is undergoing a major transformation, shaken by the crypto wave that is showing no signs of abating. Recently, a wave of panic and fascination has been blowing through the upper echelons, as financial players are taking multiple positions. The adoption of digital assets like Bitcoin, once reserved for tech-savvy pioneers, is rapidly spreading to the most influential financial advisors. The crypto tsunami is hitting hard, and the first cracks are appearing in the citadel of traditional finance.
Bitcoin Invades Financial Advisors' Personal Wallets
During a recent Financial Advisor Summit in the United Statestwo months before the Bitcoin 2024 Conference in Nashville, a surprising event has left its mark. Matt Hougan, CIO of Bitwiseasked a simple question: “ Who has Bitcoin in their personal wallet? »
Two years ago, barely 20% hands were raised timidly. But this year, more than 70% of advisors present raised their hands, revealing a massive and accelerated adoption of Bitcoin. This phenomenon is not trivial.
Financial advisors now seem convinced by the strength and appeal of the king digital asset. However, paradoxically, few of them still include it in their clients' portfolios.
The reason? Major financial institutions remain cautious and the restrictions are still numerous, but this cannot last. Hougan points out that these professionals often test on themselves first before proposing diversification to their customers.
- In 2022, only 20% of advisors owned bitcoin;
- In 2023, the figure rose to 70%;
- Crypto funds will follow in client wallets within 6-12 months.
This sudden craze, encouraged by recent lower interest rates of the FED and theBitcoin ETF approvalshows that institutions are beginning to see this asset, once considered volatile and risky, in a different light.
Crypto market to conquer wealthy clients
The next step will be the generalization of cryptos in customers' wallets. ” Financial whales start jumping into the water“, Hougan jokes. And when the biggest fish in the financial sector jump into the crypto pool, the ripples can become devastating for traditional markets.
In a few months, it will be common to see These advisors offer bitcoin or other cryptos to wealthy clients.
This gradual adoption is not without risk. Indeed, cryptos, and in particular bitcoin (BTC), still suffer from strong fluctuationsBetween market volatility and still uncertain regulations, investors must prepare for potential waves of instability.
Moreover, hacking risks are well present and the security of digital assets remains a major challenge to be met. The crypto market remains fragile and poorly regulated, which makes transactions and protection of uncertain fundsespecially in the event of a flash crash.
Despite this, interest is not waning, and financial advisors expect cryptos to become more widely available to their clients. For the most optimistic, Bitcoin could even become a store of value in the long term, comparable to gold, says the New York FED.
The time has come for these traditional financial players to embrace the digital revolution, while keeping a close eye on market upheavals.
The big jump by institutional investors into crypto is encouraging, but the potential monopoly of these players could stifle supply. The specter of a Bitcoin shortage looms.
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