Getting formal numbers when it comes to Bitcoin and cryptocurrency assets is not always an exact science. Some figures point to 100 million people on the planet using Bitcoin, nearly half of which are in the United States. After the growth of 2021, the total cryptocurrency market worth an estimated $2 trillion ($800+ billion in Bitcoin alone) even after the sell-off. Despite some disparities, Bitcoin and crypto are undeniably becoming another asset class. In fact, the only two U.S. companies worth more than the current $2 trillion market are Apple Inc. (NASDAQ: AAPL) at $2.7 trillion and Microsoft Corporation (NASDAQ: MSFT) at $2.24 trillion.

Bitwise Asset Management, which manages over $1.3 billion in assets, has released its Bitwise/ETF Trends 2022 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets. This is the fourth annual survey release of this kind. The key takeaways are 1) the coming asset allocations that are obviously coming, and 2) loose talk of a $100,000 price target on Bitcoin.

Before showing the survey results, we need to address some things that have taken place to the present date. One amazing feat about Bitcoin is that the growth that has been seen has taken place almost entirely without mainstream brokerage accounts and without financial advisors getting their clients into Bitcoin and other cryptocurrencies. That is changing, and the crypto community has its eyes on “asset allocations” that are starting to occur. Bitcoin believers are now considered “HODLrs” in the same sense that big believers of gold are considered “gold bugs.”

October of 2021 ushered in the ProShares Bitcoin Strategy ETF (NYSEArca: BITO) and it became the fastest to take in $1 billion. Other smaller Bitcoin futures exchange-traded products have followed suit, but none have approached the same valuation.

What happens when “asset allocations” begin to become more common in Bitcoin and the cryptocurrency market? For starters, the entire metaverse and the rise of Web3 will be all about cryptocurrencies. That will have to include stable coins and central bank digital currencies (CBDCs).

SURVEY BY THE NUMBERS

According to the Bitwise Asset Management survey of more than 600 financial advisors (independent registered investment advisors, broker-dealer reps, financial planners, and wirehouse reps) the number of advisors giving allocations jumped by over 65%. The tally a year earlier was just 9% of advisors, and the new tally is still just 15%.

One finding is stark as to how many more advisors are planning to allocate assets to crypto in client accounts — an additional 14% of advisors said they will “probably” or “definitely” allocate in 2022.

Another milestone is that almost every single advisor surveyed received incoming interest from clients. Bitwise showed that 94% of the advisors surveyed received questions from clients about crypto in 2021 (from 81% the year before).

EXCHANGES & ETFs

The IPO of Coinbase Global Inc. (NASDAQ: COIN) in April of 2021 appears to have been a catalyst bringing financial advisor attention on crypto equities. That was before the “Bitcoin Futures ETF” launched. The survey revealed that roughly equal numbers of advisors indicated a desire to allocate to crypto equities (46%) versus crypto assets like bitcoin (45%).

Another anticipation is a “Spot ETF” rather than a futures ETF. The “BITO” and others to date are only approved to own Bitcoin futures rather than a spot allocation. Bitwise indicated that 82% of advisors responded that they would prefer investing in a spot Bitcoin ETF versus the futures-based alternative.

BITCOIN TO $100,000… ! or ?

Another finding was an increasingly bullish view on future prices. The Bitwise survey showed that 53% of the respondents expect that Bitcoin’s price will rise to $100,000 or more within five years. That figure was only 15% of respondents a year earlier.

Bitwise further addressed regulation and volatility keeping advisors away. Some 60% of advisors cited “regulatory uncertainty” as a barrier to greater crypto adoption in portfolios, and 53% of respondents expressed concerns about volatility. Those figures were up from 52% and 38%, respectively, a year ago.

More details of the survey are available.

BITWISE & ETF TRENDS OFFICIAL QUOTES ON CRYPTO

Matt Hougan, Chief Investment Officer for Bitwise Asset Management, said:

We are approaching the tipping point for the widespread adoption of crypto by financial advisors. Two years ago, just 6% of advisors were allocating to crypto in client accounts; today it’s 15% and our survey suggests it will be nearly 30% by year-end. The implications are significant, as financial advisors direct the vast majority of private individual wealth in America. Advisor engagement in the space isn’t just growing … it’s growing at an accelerating rate.

Tom Lydon, founder and CEO of ETF Trends, said:

Advisors and their clients are becoming more confident and discerning in their understanding of crypto. Advisors are looking for vehicles to express their viewpoints on the crypto market, and we are excited to share the data on how those views have evolved this year.

SOME INDEPENDENT FIGURES

Before just relying on any one survey, some independent numbers need to be considered. We have already laid out some of the population and total assets on a relative basis.

$1 billion in the largest “Bitcoin Futures ETF” can likely become a lot larger if a spot ETF is approved. The hedge against the world and inflation used to be all about gold and silver. Let’s look at the value of the two largest ETFs here. The SPDR Gold Shares (NYSEArca: GLD) was last seen with a market cap of $57.6 billion alone. The iShares Silver Trust (NYSEArca: SLV) had a market cap of $12.5 billion.

Goldman Sachs recently opined that Bitcoin and crypto could “flip” gold, meaning that the assets in crypto could become larger than gold.

How many nations will adopt and ban Bitcoin and crypto? China was the largest “Crypto Ban” to date, but Bitcoin has gone on without China as that nation is slowly rolling out its own CBDC. El Salvador was the first nation to adopt Bitcoin unilaterally. Brazil is looking as though it will be the next nation to go crypto, and Rio de Janeiro has announced plans to hold 1% of the city’s treasury in cryptocurrency.

Credit Suisse has issued a report that the global population of millionaires was 56.1 million in 2020. That figure may be closer to 60 million in 2022. What happens if every millionaire decides that owning the equivalent of 1 Bitcoin is now the ultimate hedge?