Cetera Financial Group announced Thursday it will allow its financial advisors to implement spot bitcoin ETFs offered by BlackRock, Fidelity, Invesco and Franklin Templeton into client portfolios.
The $190 billion San Diego-based wealth manager introduced a new policy regarding the usage of bitcoin ETFs in brokerage accounts, including education and resources designed to help affiliated financial professionals guide their clients in incorporating bitcoin ETFs into their investment portfolios.
“We are prudently embracing bitcoin ETFs and we prioritized developing this important guidance to help our financial professionals implement these products in client portfolios.”
Cetera’s Matt Fries
“As expected, we are prudently embracing bitcoin ETFs and we prioritized developing this important guidance to help our financial professionals implement these products in client portfolios,” said Matt Fries, head of investment products and partner solutions at Cetera. “Today’s investors have increasingly complex needs, and our investment products team is here to support our financial professionals across the investment spectrum. 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.”
Cetera is among the first wealth management firms to roll out a formal policy on bitcoin ETFs as exponentially more investors are exploring the products and investing in bitcoin. Omaha, Neb.-based registered investment adviser (RIA) Carson Group greenlit the use of four bitcoin ETFs on its curated ETF platform last month—from BlackRock, Fidelity, Bitwise and Franklin Templeton.
“We want to provide the tools needed for advisors to allocate client portfolios in the most appropriate way based on their risk tolerance, preferences, and interests,” said Carson Group Vice President, Investment Strategist Grant Engelbart, in an article posted on the company website Thursday. “If clients are interested, we now have options to add small allocations within the context of their overall portfolio and do so in a risk-controlled way.”
Cetera, meanwhile, has approved usage of the following spot bitcoin ETFs: Invesco Galaxy Bitcoin ETF (BTCO), Franklin Bitcoin ETF (EZBC), Fidelity Wise Origin Bitcoin Fund (FBTC), and Blackrock iShares Bitcoin Trust (IBIT). The selected funds are “sponsored by leading ETF providers with track records of successfully launching new product strategies, and are well positioned with established resources, tools and knowledge,” Cetera noted in a press release. Training will be available for financial professionals on Cetera’s AdviceWorks portal starting on March 25.
The 10 U.S. spot bitcoin ETFs that were approved by the SEC in January have tallied nearly $12 billion of net inflows in their first nine weeks of trading, according to BitMEX Research data. Despite its roughly $11.7 billion of net outflows, the Grayscale Bitcoin Trust ETF (GBTC) leads the category with more than $26 billion in assets, as noted by website Blockworks. IBIT and FBTC are next, with about $15.9 billion and $9.2 billion, respectively.
Senators urge SEC not to approve more crypto ETFs
Notably, a pair of U.S. Senators this week sent a letter to SEC Chairman Gary Gensler urging him not to approve any more crypto ETFs, citing “enormous risks” to retail investors. The letter, from Jack Reed (D-RI) and Laphonza Butler (D-CA) claimed that allowing any further approvals of crypto ETFs would see investors exposed to “thinly traded” markets rife with fraud and manipulation.
The senators also urged the SEC to take “several specific steps” with the already launched bitcoin ETF products, requesting that BTC ETF brokers and advisors be subjected to further regulatory scrutiny. Those steps include carefully scrutinizing brokers’ and advisors’ communications regarding the products, ensuring they are acting in their clients’ best interest.
There are eight proposed spot Ether ETF applications awaiting approval by the SEC, and other altcoins are expected to seek approval as well. That approval is far from guaranteed, as analysts at Bloomberg recently lowered the chances of a regulatory green light to just 30%.
Demand remains strong
Carson Group’s Engelbart notes that bitcoin ETFs have garnered significant assets in a short period of time. “In just two months, we’ve seen more flows into Bitcoin ETFs than any single fixed income ETF category,” Engelbart wrote. “While these flows are somewhat offset by outflows in the largest cryptocurrency ETF (GBTC), there is clearly new demand entering the market through these products and creating buying pressure on price.”
Bitcoin hit a fresh all-time high for the fourth time in six days, bolstered by record-breaking inflows into US exchange-traded funds tied to the cryptocurrency.
The world’s largest cryptocurrency reached a high of $73,664 on Wednesday, Bloomberg reports. Meanwhile, net daily inflows into U.S. spot Bitcoin ETFs on Tuesday topped $1 billion for the first time, data compiled by Bloomberg show, with BlackRock’s IBIT setting its own record at $849 million in daily flows.
The continued strong demand for bitcoin ETFs—with $563 million of net money flowing into the segment on Monday—comes as Bloomberg Intelligence analysts have said bitcoin ETF assets under management could pass gold ETF assets within two years.
“The Bitcoin ETFs, though barely six weeks old, have taken in over $8 billion more than gold peers, already have 40% as much in assets and could pass them in size in less than two years,” said a Feb. 26 research report shared on X by senior Bloomberg analyst Eric Balchunas and associate analyst Andre Yapp.
SEE ALSO:
• SEC Approves 11 Spot Bitcoin ETFs, Opening Floodgates
• Bitcoin ETF Approval Draws Closer with Grayscale Court Win Over SEC
• Cetera Buys $1.4 Billion RIA Firm
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.