Why financial advisors are finally embracing crypto in 2025

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Why financial advisors are warming up to crypto

Clients are asking about crypto more than ever. Ninety‑six percent of financial advisors heard crypto questions from clients in 2024. And once advisors add crypto to portfolios, 99 percent plan to keep or grow that exposure. But most clients invest on their own — 71 percent do — creating both missed opportunities and friction for advisors. This surge in interest means advisors can’t stay silent. They must understand crypto to stay relevant, retain clients, and turn held‑away assets into managed opportunities.

Client demand is forcing a rethink

Clients now expect their advisors to understand crypto — 82% of high‑net‑worth investors say they’d favor advisors with digital‑asset knowledge, while nearly a third see a lack of crypto experience as a red flag. Many are already buying the first cryptocurrency on their own using only cards on cryptocurrency exchange platforms like Changelly, creating both a risk gap and a chance for advisors to step in.

And most advisors are hearing from clients already — 96% got crypto questions in 2024.

But — despite the demand — only about 22% of advisors have actually allocated crypto into client accounts so far.

Or, put another way — clients are exploring crypto independently. 71% of advisors reported clients investing on their own, creating both a risk gap and a chance for advisors to step in. 

This client pressure is pushing advisors to act. The path to staying relevant, protecting clients, and winning more trust means getting crypto-savvy — and fast.

Crypto as a portfolio diversifier

Benefits of adding crypto to a portfolio often start with better diversification. It moves differently than traditional assets like stocks or bonds. And that means it can help lower overall risk while still offering strong returns. A modest 1% Bitcoin allocation boosted return and Sharpe ratio in model portfolios — with little added volatility or deeper drawdowns — especially when rebalanced regularly. Larger allocations, such as 5%, delivered even bigger gains while keeping risk manageable.

But markets shift. Bitcoin’s correlation with equities has risen, so diversification benefits may be shrinking. Yet crypto continues to appeal as a diversifier, especially when traditional markets are volatile. A record $167 billion in crypto fund assets in May 2025 reflects institutional interest in crypto’s hedge potential.

Or think of it this way: a small, well-managed crypto slice can enhance portfolio efficiency without turning it overly risky. It’s about balance, not going all-in.

Market maturity and institutional legitimacy

Crypto infrastructure is getting stronger, and financial institutions are taking notice. Custody services, trading systems, and ETFs are now built for pros — not just hobbyists. And regulators are stepping up, making it easier for trusted firms to join the market. Institutions now see crypto as a credible asset class.

Spot Bitcoin ETFs have unlocked access to a broader investor base, boosting inflows and credibility. Meanwhile, mature custodians and infrastructure firms — anchored by federal charters and institutional backing—are helping advisors integrate crypto with confidence. Project Crypto and the CFTC’s “Crypto Sprint” are clarifying token classifications and licensing pathways, further smoothing the way. The result? Crypto is moving from fringe speculation to a dependable building block in modern portfolios.

This shift matters. As systems improve and rules crystalize, advisors can add crypto with less risk. Clients gain access — not through DIY investing — but through advisors who can manage crypto strategically, compliantly, and wisely.

New tools built for advisors

Advisors now have crypto tools made for them — not DIY platforms. And that creates real advantages.

Onramp Invest offers solutions tailored to advisors. It delivers access to custodians, separately managed accounts, and ETFs. And it even supports block trading — letting advisors execute large trades across clients as one institutional order, saving on costs and improving fairness.

Fidelity Digital Assets provides custody, trading, and research under institutional controls. It offers a fully integrated platform with security audits and client support built in.

Veli, an EU‑licensed platform, lets advisors manage all their clients in one place. It supports individual coins, strategy portfolios, and pre‑built options—all with secure storage and even revenue sharing.

Swan Bitcoin gives clients direct Bitcoin ownership through a qualified custodian arrangement. Advisors can customize custody models based on how they work with each client.

Or use Eaglebrook Advisors. They provide tax‑optimized Bitcoin and Ethereum SMAs managed by professionals — taking complexity off the advisor’s plate.

These tools make it easy, compliant, and efficient for advisors to bring crypto into client portfolios.

Overcoming regulatory and compliance hurdles

Regulation is catching up — and that matters for advisors. U.S. agencies like the OCC, Federal Reserve, and FDIC now require banks to follow established laws when safeguarding crypto assets, making this service more reliable. And the SEC recently released FAQs to clarify how broker-dealers can manage crypto — both securities and non-securities — within existing rules.

But advisors still face uncertainty. The CLARITY Act, which would split oversight between the CFTC and SEC based on whether tokens are commodities or securities, passed the House on July 17, 2025 and awaits Senate review. Meanwhile, the GENIUS Act — signed July 18, 2025 — sets rules for stablecoins, demanding they be backed by safe assets like U.S. dollars or Treasuries.

Or put it simply: clearer rules are arriving fast. That means advisors can bring clients into crypto with more confidence. They just need to know which laws apply and follow them carefully.

Educational gaps and the race to upskill

Advisors want crypto knowledge — and they’re paying for it. A CoinShares survey found that over 80% of advisors are willing to invest in education to close gaps in digital asset expertise. And that need goes beyond basics. A Certificate in Blockchain and Digital Assets teaches crypto essentials — like Bitcoin, Ethereum, DeFi, NFTs, even crypto tax and compliance. It’s designed specifically for financial professionals.

Or they can pursue the Certified Digital Asset Advisor designation. It covers crypto, blockchain, and decentralized finance in depth — and shows clients you’ve done the work. FINRA is joining the effort too: they’re launching a Crypto and Blockchain Education Program with both self-paced e‑learning and live training through Georgetown University — available starting October 2025.

But knowledge alone isn’t enough. Advisors who take these courses gain confidence. They can discuss risks, compliance, and strategy clearly and professionally. These programs help bridge uncertainty — so advisors can speak crypto fluently and guide clients wisely.

Common misconceptions still holding some back

Misunderstandings about crypto persist — and those myths slow advisors from integrating it. Many believe crypto is only for criminals. But data show illicit activity makes up just a tiny fraction of blockchain transactions.

And plenty think investing in crypto is automatically complicated, involving confusing wallets and risky exchanges. Yet many advisors now use exchange-traded products, which work like familiar funds and cut out those technical hurdles.

Or some say crypto investing is a zero-sum game — one person’s win equals another’s loss. Reality is different. The crypto world includes DeFi, NFTs, and smart contracts, which add real value and innovation.

But advisors also worry about volatility, security, and unclear rules. Only about 10% actively manage crypto for clients.

Debunking myths helps. Advisors who learn that crypto isn’t inherently shady, that ETPs simplify access, and that the ecosystem builds value are more likely to gain confidence. They can then guide clients clearly and boost trust — rather than just holding back.

The future outlook: From fringe to fiduciary

Crypto is increasingly moving from fringe assets to standard part of advisory portfolios. Nearly 40% of high-net-worth individuals expect crypto to be included in their future holdings — especially among younger investors, where that number rises to 53%. And the approval of spot Bitcoin ETFs has only intensified that interest.

Traditional finance is responding. Oliver Wyman predicts crypto and blockchain will reshape core financial services — helping tokenized assets and DeFi gain acceptance and become embedded in mainstream advisory work.

Tokenization — converting physical assets into digital tokens — could unlock trillions in new portfolio opportunities, enabling fractional ownership of real estate, bonds, or art. This may deepen crypto integration into client strategies.

Or look at global regulatory moves. The EU’s MiCA framework and the U.S. FIT21 and GENIUS Acts are bringing legal clarity to crypto, making it easier for advisors to operate with confidence.

Or simply: crypto isn’t a niche anymore. By learning, adapting, and using new tools, advisors can meet client expectations and build modern, diversified portfolios with digital assets. 

This is a sponsored post whose views and opinions do not necessarily represent those of illuminem.