Bitcoin surge has caught an entire industry “flat footed,” says Tyrone Ross. (Photo illustration by … [+]
In the wake of bitcoin’s unprecedented surge past $90,000 following November’s U.S. elections, financial advisors – particularly those in the wirehouse channel – are in an increasingly frustrating position, with many finding their hands tied when it comes to one of the most talked-about asset classes of our time.
Tyrone Ross, CEO of 401 Financial and Turnqey Labs, spoke to this frustration in a phone interview last week: “There is a frustration that the advisors typically cannot discuss it with clients. They can’t bring it up. They’re admonished not to say anything at all, and they are embarrassed by that. It just makes them look silly.”
Last week, Ross shared a screenshot on X (formerly Twitter) of a message from a seemingly disillusioned wirehouse advisor.
In a follow up screenshot posted to X, the advisor wrote, “The fact that we can’t even talk about it is a problem. It makes us look so bad.”
Client Trust And Relationships At Stake
The inability to engage in meaningful conversations about crypto is more than just an inconvenience—it’s potentially damaging to advisors’ professional reputations. “Wirehouse advisors are very much about their brand, looking astute, and being aware,” Ross explained. “When clients constantly ask about crypto and they have to deflect away from it, it lessens their credibility in their clients’ eyes.”
This credibility gap is widening as bitcoin’s price continues to climb, leaving many advisors in the uncomfortable position of having to sidestep discussions about one of the market’s best-performing assets. This limitation is particularly pronounced when it comes to spot bitcoin ETFs. Ross said, “Even if they can discuss it, they can’t solicit it. The client has to reach out and ask for something like the bitcoin ETF.”
Slow And Restrictive Adoption
In March 2024, Reuters reported Bank of America’s Merrill Lynch and Wells Fargo had made spot bitcoin ETFs available to “eligible” wealth management clients, with Wells Fargo confirming these ETFs were available for “unsolicited purchases.” And in August 2024, Morgan Stanley reportedly became the first wirehouse to allow advisors to actively push select spot bitcoin ETFs.
“Morgan Stanley made the move in response to demand from clients and in an attempt to follow an evolving marketplace for digital assets, said the people, who declined to be identified speaking about the bank’s internal policies,” wrote CNBC’s Hugh Son. “Only clients with a net worth of at least $1.5 million, an aggressive risk tolerance and the desire to make speculative investments are suitable for bitcoin ETF solicitation, said the people.”
Reasons For Optimism
In a September blog post from Bitwise Asset Management’s Chief Investment Officer Matt Hougan, he recounts a scene from his keynote address at the Barron’s Advisor 100 Summit. When he asked the room to raise their hands if they own bitcoin or another crypto asset in their personal portfolio, he estimated “at least 70% of the advisors in the room raised their hands.”
“To be clear: When I asked the same room how many of them had allocations to bitcoin in client accounts, very few kept their hands raised. Many of these advisors work for broker-dealers that do not even allow them to buy bitcoin ETFs yet,” Hougan explained. “More than anything, what I took from the event is that a wave of the most powerful people in finance are finally allocating to crypto. When it spreads from them to their clients, things could get interesting quickly.”
As bitcoin and other cryptocurrencies continue to gain mainstream acceptance, the pressure on financial institutions to adapt their policies is mounting. The recent surge in bitcoin’s price following the U.S. elections has only intensified this pressure. “The entire industry was caught flatfooted,” Ross observed.
As the crypto market evolves and matures, it’s becoming increasingly clear that the current approach of many financial institutions is unsustainable. Advisors need the tools, education, and freedom to discuss crypto assets openly with their clients if they hope to provide truly comprehensive financial advice in the 21st century.
The coming months and years will likely see significant changes in how the financial advisory industry approaches cryptocurrencies. For now, however, many advisors find themselves in an unenviable position—watching from the sidelines as one of the most significant financial phenomena of our time unfolds.
