Crypto for Advisors: The 2024 Year Ahead
Advisors now have a better – but still nascent – array of investment options to help avoid the pitfalls of early-adopter risk and exploit a generational opportunity in 2024.
We are on the precipice of an exciting 2024 with a lot of news, activity and anticipation of spot bitcoin ETF approvals and potentially large influxes of capital into the space.
2024 Crypto Market Outlook for Advisors
Financial advisors and their clients should prepare for a potential transformative leap forward for the crypto asset class in 2024. Significant advances in market structure in 2023 and deep industry innovation in the new year indicate that rapid institutional adoption, meaningfully improved advisor investment accessibility and bullish catalysts for asset prices (not just bitcoin) may lie ahead. Below, we provide a 2024 crypto outlook for investors seeking to diversify their overall asset mix and enact a thoughtful digital assets allocation plan.
When it comes to digital assets, advisors should ask themselves the following two questions: one, why crypto and two why now?
Lengthier answers exist for both, but the simple ones are, respectively:
1. Only a few of us have been around for the inception of a new asset class, particularly one uniquely powered by modern technology and in certain cases specifically programmed to combat the glut and frictions of traditional financial markets. Obtaining exposure to an alternative set of assets rooted in legitimate value – measurable by blockchain metrics – is a diversifying and generational opportunity.
2. The industry is transitioning from early adoption to mass adoption. A sea change in industry leadership, product development and fiduciary commitment swept crypto in 2023, enabling a new suite of increasingly institutional-grade on-ramps into the asset class.
Besides general industry trends, conspicuous catalysts in 2024 may also trigger rapid investor adoption of digital assets. These events include the potential (and seemingly likely) regulatory approval of Bitcoin and Ethereum spot ETFs, the Bitcoin halving scheduled for April 2024 (a once-every-four-years event that reduces the supply of new bitcoin), and a dovish macroeconomic backdrop and slowing inflationary environment – each on their own a meaningful bullish nod for crypto, but together a potentially rare opportunity for portfolio positioning.
