How Can I Educate Clients About Digital Assets?
To help you navigate today's dynamic market, and help your clients achieve their goals, we’ve launched From the Field. Each month, our State Street SPDR® ETF Strategy team will answer timely questions from advisors like you.
ETFs and digital assets share an interesting characteristic — both are technologies developed to solve a problem.
Launched in response to the 1987 market crash known as Black Monday, ETFs made it possible to trade “the market” in a single vehicle on an exchange. Similarly, digital assets like bitcoin grew out of the Global Financial Crisis. They emerged as an alternative to the traditional banking system that nearly collapsed, and also in response to the extraordinary monetary policy that significantly increased the money supply.
Both technologies — ETFs and digital assets — were first met with skepticism. But after an immense amount of education, the benefits of ETFs eventually became too hard to ignore. And today, ETFs represent a $10 trillion global industry. Digital assets have the same potential, and your clients are looking to you to help them make sense of the potential benefits and risks.
Bridging the Digital Assets Knowledge Gap
In 2020, there were an estimated 66 million crypto owners.1 By 2024, that number had soared to 617 million — with 101 million added in the last year alone.2
Surveys continue to show growing interest in digital assets:
- 94% of institutional investors believe in the long-term value of blockchain and/or digital assets.3
- 64% of retail investors have invested in digital assets or related products.4
- 71% of advisors said “some” or “all” of their clients were investing in crypto on their own.5
But digital assets aren’t exactly straightforward, and the environment continues to evolve at an unprecedented rate.
Whether your clients view digital assets as a speculative investment or a disruptive technology that may change traditional finance, investing in these assets without foundational knowledge can lead to poor investment choices.
As a fiduciary, it’s important to be educated about digital assets — and to pass that knowledge along to your clients.
Questions to ask clients considering investing in digital assets include:
- How familiar are you with digital assets and blockchain?
- What are your primary reasons for considering digital assets? (e.g., diversification, speculation, long-term growth, inflation hedge, etc.)
- Do digital assets align with your risk tolerance?
- What is your investment horizon for this new asset?
- Is the asset’s liquidity a match for your portfolio?
- How does this fit into your broader investment strategy?
How We Can Help
The State Street SPDR® ETF Strategy team offers educational resources to help you and your clients understand digital assets and how to invest in them.
- The Investor's Guide to Digital Assets
- Digital Assets Academy | A Masterclass for Investors
- How to Invest in Crypto Without Buying Crypto
- The Future of Crypto: Why Smart Investors Are Backing the Ecosystem
By combining education and strategic guidance, you can help clients make informed decisions about adding digital assets to their portfolios, while ensuring alignment with their broader financial goals.
If you have questions or want to learn more about digital asset investing, please contact us. And let us know if there’s a question From the Field that you’d like us to tackle in a future article.
The State Street SPDR® ETF Strategy team has the privilege of meeting regularly with financial advisors across the industry. These conversations provide a unique window into the challenges you face — and enhance our dedication to supporting you with the products and insights you need to better serve clients and grow your practice.