While Federal Reserve rate hikes and other anti-inflationary measures will likely continue to cause volatility, Blonski said 90% of the institutions, family offices and big-wallet investors were still buying throughout the past week’s plunge, according to chain metrics. While the skittish sell off of by 10% of owners--mostly smaller investors-- took the price of bitcoin as low as $33,000 (down from $42, 581 on January 13), the price had rallied to $38,250 by noon today.
“We work almost entirely with retirees or those who are about to retire, so our client portfolios tend to be conservative and don’t hold much crypto or Bitcoin. We don’t go above 5% of portfolio value for those that do have it, and we generally like to see it in Roth accounts for its growth potential,” Matt Bacon, an advisor with the firm of Carmichael Hill said.
“Bitcoin has been around a little over a decade and these spates of gut-wrenching volatility are par for the course,” Carmichael added. “Adding it as part of a systematic rebalancing strategy is the best call, in my opinion. Its worth noting that Bitcoin took about three years to reach a new high after it crashed at the end of 2017. Anyone speculating in hopes of a quick buck may be waiting longer than they think,” Bacon added.
The survey found that fear of regulation and volatility are keeping some advisors on the sidelines, with 60% of advisors citing “regulatory uncertainty” as a barrier to greater crypto adoption in portfolios, up from 52% in last year’s survey. Volatility also loomed large, with 53% of respondents expressing concern, compared to 38% the year before, Bitwise found.
Still, Blonski and more than half of advisors surveyed by Bitwise are increasingly bullish on crypto valuations. More than half (53%) of respondents believe that the price of bitcoin will top $100,000 within five years. In last year’s survey, only 15% of respondents thought bitcoin would climb into the six figures.
“Advisors and their clients are becoming more confident and discerning in their understanding of crypto,” Tom Lydon, founder and CEO of ETF Trends said.