On Monday (December 4), Ric Edelman, founder of Edelman Financial Services, said that financial advisors are currently very eager to launch spot bitcoin exchange** (ETFs) for their clients.
Ric Edelman noted at Coindesk's Unchained that approval by the U.S. Securities and Exchange Commission (SEC) is critical to the legality and acceptability of these financial products in the traditional financial system.
Every compliance department will give the product an affirmation because it is just an ETF, just like ETFs with other themes. ”
According to a survey shared by Ric Edelman, about 77% of advisors are waiting to offer spot Bitcoin ETFs to their clients. He highlighted that these ETFs are similar to other ETFs that are used to invest in sectors such as technology, oil and gas, ** and ***, and emerging markets.
In addition, Ric Edelman mentioned that 47% of advisors have already included Bitcoin in their portfolios, suggesting that they are confident in the asset's potential to generate significant investment returns.
There is a general expectation that the SEC will approve multiple spot Bitcoin ETFs at the same time. Bloomberg ETF analyst Eric Balchunas** has a 90% chance of approval by January 10, and this has remained unchanged over the past few months.
Meanwhile, Bitcoin broke through the $40,000 mark for the first time since late April 2022 last Sunday. The idea is gradual, and the expectation that the Bitcoin spot ETF will be approved by the U.S. Exchange Commission has boosted Bitcoin's growth.
Credibility challenges faced by individual investment advisers
What's more, another recent survey revealed that 47% of financial advisors personally hold Bitcoin. This presents a challenge for financial advisors, as they need to explain this investment option, especially when a client asks if they own Bitcoin.
Ric Edelman emphasized that financial advisors need to explain this when a client asks if they should buy Bitcoin and asks if they hold it themselves. If the financial advisor replies, "Yes, I've been holding it for years, I just never advised you to buy it", this could affect the financial advisor's credibility and could lead to client dissatisfaction or even loss of clients.
According to Ric Edelman, ETFs provide the easiest entry point for most investors. "Everyone is familiar with ETFs, which are the most popular investment vehicles in the United States. They are low-cost, highly liquid, and fully transparent. ”
Edelman also noted that the company will launch an extensive advertising and marketing campaign for the many spot Bitcoin ETFs that are currently seeking approval once they are finally listed.
Investors are going to see this activity, and these investors are going to reach out to their financial advisors and say, 'I keep seeing ads from all these companies promoting this new ETF.'" Which one should I buy?”
Ric Edelman said consultants don't have a lot of options. "They're going to have to help their customers. Otherwise, they run the risk of losing customers and assets. ”
According to Ric Edelman, all of these factors should drive up to $150 billion in funds invested in spot Bitcoin ETFs over the next two to five years.
Ric Edelman's estimate is based on the fact that investment advisors manage about $8 trillion in assets in the United States, which would equate to about $150 billion if 75% of those advisors ended up allocating 2% of client funds to Bitcoin.
While Ric Edelman personally advises clients to allocate 1% of their portfolio to Bitcoin, he says that the final percentage could be a bit higher as it continues and clients become more comfortable investing in cryptocurrency. This inflow of funds in itself should help push Bitcoin's ** higher.
"I think the people who end up choosing to do that are going to put in about 2 to 3 percent of their assets," Ric Edelman said. Bitcoin is currently only $500 billion, which will be a massive inflow of money into the asset class, which will have a profound impact on it. ”
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