Jan 14, 2020 at 19:00 UTCUpdated Jan 14, 2020 at 19:56 UTC

Matt Hougan image from CoinDesk archives

More than half of financial advisors in the U.S. are too spooked by regulatory uncertainty to initiate or expand their cryptocurrency investments, a new study by Bitwise Asset Management found.

The annual survey, released Tuesday, asked 415 advisors a range of questions on their crypto sentiments, including where they think the market is going, how their clients approach crypto and what it would take for them to invest more in the space. Bitwise found advisors are increasingly bullish on bitcoins future but hesitant to invest in it for their clients or themselves.

Bitwise conducted the survey in December.

Only 6 percent of respondents currently invest clients' funds in crypto assets, and the holdouts largely plan to continue avoiding crypto in 2020; 55 percent said they will probably or definitely not invest in crypto this year, while only 7 percent said they probably or definitely will.

The survey found a notable slice of fence-sitters, too: 38 percent are unsure what theyll do this year, which is significant, said Matt Hougan, Bitwises global head of research, who conducted the survey.

Advisors are intrigued by cryptos proven history of delivering uncorrelated returns or high returns, Hougan said. However, many continue to balk at investing, largely because of regulatory uncertainty and questions of access.

Fifty-six percent of respondents said regulatory concerns are preventing them from embracing crypto assets. This is despite what Bitwise describes as significant progress in the crypto regulatory space in 2019, including action by New Yorks Department of Financial Services and steps toward a regulated bitcoin exchange-traded fund.

Respondents are looking at the regulatory landscape. According to the 2019 figures, 42 percent indicated regulation was their top concern, while, looking ahead, this year a majority, or 58 percent, said better regulation could spur them to invest.

Hougan said even small increases in investors crypto allocations could be a boon for the market overall. He said advisors control $24 trillion in assets, dwarfing bitcoins current market cap of about $160 billion.

Crypto people are over-focused on institutions as the next wave of adopters and under-focused on advisors, who control just as much as the institutions, he said.

The survey finds advisors increasingly think bitcoin is on the rise. Sixty-four percent project it will add value by 2025, while 8 percent think the market will crash by years end.

Their clients, too, seem to show notable interest in cryptos future and sometimes outside of their relationships with the fiduciary; 35 percent of advisors believe that some of their clients are investing in crypto themselves. A far larger slice of the advisors 76 percent said they fielded clients crypto questions in the past year.

Hougan said advisors attitudes towards the market made strides through 2019; compared to the nadir of December 2018, when bitcoins price made historic lows, advisors are more positive this year.

Last year people were not sure if crypto would survive. Now people are more confident, he said.

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More Than Half of Financial Advisors Want Better Regulation Before Investing in Crypto - CoinDesk