Wealth management and financial advisory firm Cetera Financial Group has taken a significant step to adopt bitcoin investments by approving the usage of four U.S. spot bitcoin Exchange-Traded Funds (ETFs) for its extensive network of 9,000 affiliated professionals. This decision marks a notable pivot toward embracing digital assets within the traditional finance sector.
The selected ETFs are BlackRock’s IBIT, Fidelity’s FBTC, Franklin Templeton’s EZBC, and Invesco’s BTCO. Cetera cites these issuers’ track record in successfully launching new product strategies, coupled with their comprehensive resources, tools, and knowledge, as key factors in their selection.
Cetera Financial Gourp: Equipping Professionals for Effective Advising
Cetera positions itself as one of the pioneers among wealth management firms in formalizing a bitcoin policy. It highlights the growing investor interest in bitcoin as an asset class, estimating that around 50 million individuals owned bitcoin as of February 2024.
According to a company statement released on Thursday, under the new policy, Cetera will provide educational resources aimed at enabling its financial professionals to effectively advise clients on incorporating these bitcoin ETFs into their investment portfolios. The training sessions are set to start on March 25, equipping advisors with the necessary insights to navigate the complexities of digital asset investments.
Matt Fries, Cetera’s Head of Investment Products and Partner Solutions, emphasized the firm’s proactive approach to embracing bitcoin ETFs and expressed readiness to adapt policies in response to evolving market dynamics. He stated:
“We will continue to proactively evaluate the implications of bitcoin ETFs and related products and modify our policies accordingly, and we look forward to partnering with our financial professionals to adopt bitcoin ETFs when appropriate with their clients.”
Financial Advisory Firms’ Growing Interest
Nate Geraci, President of The ETF Store, noted the development on social platform X, emphasizing the growing trend among financial advisory firms to prudently embrace bitcoin ETFs. He stated:
“Financial advisory firms are now issuing press releases regarding use of bitcoin ETFs. In other words, attempting to use bitcoin ETFs as a point of differentiation/competitive advantage. Things are getting wild.”
On a similar note, analysts at JMP Securities foresee a surge in the adoption of U.S. spot bitcoin ETFs over the next three years, projecting inflows of up to $220 billion. This influx of capital could potentially catalyze a significant uptrend in bitcoin’s price, with estimates suggesting a fourfold increase to $280,000, considering the multiplier effect on new investments.
The anticipated surge in capital allocation towards bitcoin ETFs is expected to have profound implications for the BTC market. Increased demand for ETFs may lead to a scarcity of sellers, resulting in a shallower order book and heightened prices for bitcoin.
Spot ETFs Resilient to Market
Meanwhile, despite a recent downturn in bitcoin prices, spot ETF inflows have remained relatively resilient. On March 15, BlackRock’s IBIT reported a net inflow of $345 million, while Grayscale’s GBTC experienced outflows of $257 million, according to data from BitMEX Research.
Since the launch of spot bitcoin ETF trading on January 11, total net inflows stand at just under $12 billion, indicating sustained investor interest in bitcoin amidst market fluctuations.
