Financial Advisors Gradually Embrace Bitcoin Amid Volatility Concerns

Coin WorldWednesday, Jun 11, 2025 2:33 pm ET
2min read

Financial advisors are still grappling with the complexities of Bitcoin, nearly a year and a half after spot exchange-traded funds were introduced to the U.S. financial system. According to Gerry O’Shea, head of global market insights at a crypto asset manager, the majority of financial advisors are not yet recommending Bitcoin or other cryptocurrencies to their clients. This hesitation is not due to a lack of interest but rather a result of the due diligence process, which takes time. Advisors are moving slowly but steadily towards understanding the role of digital assets in a portfolio.

O’Shea noted that advisors' questions have evolved from basic inquiries about what Bitcoin or blockchain is to more nuanced discussions about the role of digital assets in a portfolio. Concerns about volatility remain at the forefront, with advisors struggling to accept the regular 20% or more declines in Bitcoin's value. Energy consumption and criminality are also significant concerns, although the narrative around proof-of-work has shifted positively in recent months. Advisors are increasingly recognizing that Bitcoin mining can support renewable energy projects.

Looking ahead, O’Shea predicts that Bitcoin and stablecoins will be the main themes in 2025. He believes that smart contract platforms like Ethereum and Solana, which provide the infrastructure for stablecoins, will become increasingly interesting to investors. The utility of these platforms is widely acknowledged, with stablecoins often referred to as the first killer app in the crypto space. Despite the current hesitation, O’Shea is optimistic that more advisors will appreciate the benefits of allocating to this asset class by the end of the year.

Financial advisors are gradually shifting their perspective on Bitcoin, recognizing its potential as a valuable addition to a diversified investment portfolio. While they caution about the high-risk nature of Bitcoin and the potential for its value to drop to zero, they also acknowledge the increasing institutional interest and the potential for long-term growth. Advisors recommend starting with Bitcoin for those new to cryptocurrency, given its established position and widespread acceptance. The strategic growth of Bitcoin, driven by institutional buying and optimism from global economic talks, is expected to further fuel its adoption and price appreciation.

However, advisors warn against treating Bitcoin as a short-term investment opportunity. They emphasize the importance of a well-thought-out investment strategy and caution against buying Bitcoin in hopes of a quick price rebound. The guidance from financial experts highlights the need for a balanced approach to financial planning, incorporating lessons from market fluctuations and economic trends. In summary, while financial advisors remain cautious about Bitcoin, the sentiment is shifting towards greater acceptance, driven by the potential for long-term growth and increasing institutional interest. However, they caution against treating Bitcoin as a short-term investment and emphasize the importance of a diversified investment strategy.