Bitwise CEO: Wealth Managers Set to Invest Hundreds of Billions in Cryptocurrency

Summary:
According to Hunter Horsley, CEO of Bitwise, wealth managers are on the brink of investing significant amounts of money—potentially hundreds of billions—into cryptocurrency for their clients. This article explores the reasons behind this substantial interest, highlighting the evolving landscape of wealth management in relation to crypto investments.

Key Takeaways

Wealth managers are expected to invest hundreds of billions in cryptocurrency.
U.S. wealth managers manage an impressive $30 trillion, the largest pool of investable capital in the country.
Legal and compliance limitations have previously restricted wealth managers from investing client funds in crypto.
Even small allocations to crypto by wealth managers can lead to substantial market inflows.
A recent poll indicates strong confidence among crypto investors, with most planning to maintain or increase their investments despite market fluctuations.

Bitwise CEO: Wealth Managers Poised to Pour Hundreds of Billions Into Crypto

The Shift in Wealth Management Towards Crypto

Hunter Horsley, the CEO of Bitwise, has stated that wealth managers are likely going to invest hundreds of billions of dollars in cryptocurrency on behalf of their clients. He has distilled the essence of Devin Ryan's insights into a straightforward message: large reserves of traditionally slow-moving capital are finally beginning to engage with cryptocurrency.

In the United States, wealth managers—including financial advisors, broker-dealers, and registered investment advisors (RIAs)—oversee approximately $30 trillion in assets. This represents the largest pool of investable capital in the country, much larger than what hedge funds or venture capital firms manage.

Historically, wealth managers faced several barriers that kept them from allocating client funds to cryptocurrency. Legal restrictions prevented advisors from deploying client investments into crypto, and compliance departments had not approved the asset class for exposure. Additionally, the requirements for safely holding Bitcoin made it unfeasible to include in client accounts.

Even though Bitcoin Exchange-Traded Funds (ETFs) began launching in early 2024, wealth managers were cautious and did not rush into purchasing, despite any desires to do so.

Ryan emphasizes that this gradual approach to crypto investment is both normal and beneficial. Even a minor allocation of just 0.5% exposure from the wealth management sector could lead to inflows amounting to hundreds of billions of dollars.

Investors’ Confidence Remains Strong

Despite a recent pullback in the cryptocurrency market, a poll conducted by Hunter Horsley reveals that the confidence among crypto investors remains remarkably resilient. Out of more than 4,500 voters, fewer than 10% indicated they were selling their holdings. In contrast, over 40% reported that they are actively buying the dip, while another 37.6% are choosing to hold their current positions. This indicates a lack of panic among investors, with only 9.8% still undecided about their next move.

In summary, approximately 80% of respondents are either maintaining or increasing their exposure to cryptocurrencies, despite the market experiencing a downturn.