Jeff Benjamin

Sun, Jun 1, 2025, 5:00 AM6 min read

Even the biggest crypto-skeptic financial advisors are starting to admit: They’re paying attention.

After the price of bitcoin hit record highs, on the heels of a 42% gain over the past two months, financial advisors are starting to consider whether the notoriously volatile asset class has a rightful place inside client portfolios. “I’ve noticed an increase in client inquiries regarding bitcoin, and I go back to the fundamentals with this emerging asset,” said Nate Baim, founding member of Pursuit Planning and Investments.

Like a lot of advisors these days, Baim is focused on bitcoin’s price volatility and managing client expectations for an asset that has gained nearly 17% this year, while suffering a peak-to-trough decline of more than 40% and riding a 12-month gain of more than 60%. “Bitcoin has historically shown extreme price swings, and I expect that volatility to persist,” he said. “For those clients who wish to gain exposure, I generally suggest a conservative allocation for those who understand bitcoin’s risks.”

READ ALSO: Want a Crypto 401(k)? The DOL Isn’t Standing in the Way Anymore and Why Thrivent Wants to Hire Nearly 600 Advisors this Year

As the most popular of the cryptocurrencies, bitcoin investing has gained fast appeal since the January 2024 debut of spot bitcoin ETFs. Prior to that, crypto exposure through exchange-traded funds was limited to futures contracts, which limited the ability to perfectly track the price of the underlying digital currency. The Securities and Exchange Commission has since approved spot Ethereum ETFs and there are already funds folding in options strategies to leverage and hedge the volatility of crypto investing.

Todd Rosenbluth, head of research at TMX VettaFi, attributes at least part of the growing appeal of the asset class to the Trump administration, “which is seen as more favorable to crypto investing.” According to VettaFi data, the largest spot bitcoin ETF, the $70 billion iShares Bitcoin Trust (IBIT), has had more than $8 billion worth of net inflows this year, and nearly $6 billion came in during the month of May.

Rosenbluth believes the bitcoin price pullback earlier this year was due to uncertainty around President Trump’s global tariff negotiations, which rippled across most financial assets. The S&P 500 Index, for example, suffered a 19% peak-to-trough drop from February to April, but has since rebounded to slightly positive territory for the year.

Rosenbluth believes the crypto appeal is also being fueled by what he describes as the “second wave” of crypto ETFs aimed at various investor categories.