How to Invest in Bitcoin Without Getting in Over Your Head

How to Invest in Bitcoin Without Getting in Over Your Head

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It's harder than ever to dismiss Bitcoin as a fad or a fraud, and even longtime skeptics have come around to at least a grudging acknowledgment that cryptocurrency isn't going away. Digital assets are rapidly entering the mainstream, and financial advisors are fielding myriad questions from clients about this rapidly growing asset class.

Big-name investors like Paul Tudor Jones and Stanley Druckenmillerrevealed Bitcoin allocations in 2020, while institutions including Fidelity Investments and Morgan Stanley have made it possible for advisors and wealth management clients to purchase Bitcoin on their platforms.

But for all the hype, adoption by professional investors remains in the early stages. According to a recent Bitwise Asset Management survey, about 9% of financial advisors currently have an allocation to crypto assets in client portfolios, while 24% said they owned them in their personal portfolios. Four in five financial advisors said their clients asked them about crypto assets in 2020, and 17% said they planned to invest via client portfolios in 2021.

"We are approaching the tipping point,“ says Ric Edelman, a longtime advisor who now runs the RIA Digital Assets Council, a resource for educating advisors about blockchain technologies and cryptocurrencies. "In the past several years, the question was,