Important Conversations to Have About Crypto With Clients

Whether you’re advising on crypto, managing digital asset portfolios or just starting down this journey, the most important part for now will be the new conversations you’ll need to have.

AccessTimeIconSep 2, 2021 at 12:30 p.m. UTC
Updated May 11, 2023 at 3:22 p.m. UTC
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When we get through all the numbers and metrics that make up our business – AUM, ROI, fees, alpha, beta – what we actually end up doing is having real conversations with clients. We need to understand their situations, risk, goals and needs and discuss possible solutions and strategies.

This column originally appeared in Crypto for Advisors, CoinDesk’s new weekly newsletter defining crypto, digital assets and the future of finance. Sign up here.

Whether you are advising on crypto, managing digital asset portfolios or just starting down this journey, the most important part for now will be the new conversations you’ll need to have with clients about crypto. It’s important to remember that this is not only a new asset class, but also a new technology. Your understanding and ability to discuss it with your clients is what takes crypto from media hype and speculation to an investable asset and valuable part of a portfolio.

Here are some of the new conversations you’ll likely be having with clients as digital assets relate to their investments and financial lives.

Custody of digital assets

For quite a while, the main conversation around custody with clients has been explaining why their statement comes from Schwab or Fidelity. Crypto brings additional custodial options that you’ll have to discuss and come to some decisions.

Crypto is really centered on the idea of self-custody, which, in this case, means control over the private keys. “Not your keys, not your crypto” is a regular mantra.

In order to eliminate some of the technical barriers to adoption and investment, we now have institutional custody as an option, with providers such as Gemini, Anchorage and Kingdom Trust. We also have funds and trusts, such as the Grayscale Bitcoin Trust (GBTC) from Grayscale, and Bitwise Crypto Index Fund (BITW) from Bitwise. (Disclosure: Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.) These vehicles wrap the digital assets in an easily digestible investment product, which can be held and traded with traditional custodians.

This gives your client options with regard to the custody of their digital assets, which means they look to you for guidance. As the advisor, your job is to understand the technical risks, and how those risks are being offset by any benefits.

You might end up with a single asset, like bitcoin, held in two or three different custodial platforms, based on the investment and use case for each.

Your client can have some bitcoin stored offline (usually referred to as cold storage or a hard wallet), some in a custodial account that earns interest and some in an account you manage and trade for them. One asset, three custodial platforms, all viable.

Fear, uncertainty, doubt (FUD)

Even as we attempt to find more regulatory clarity and build custodial and trading platforms that fit within the current regulatory framework, the values of the underlying digital assets are based on worldwide supply and demand.

The prices can obviously fluctuate wildly, usually generating a call or email from clients who are invested.

This is where your new understanding and skills need to fit in. News in any number of geographic locations – or even a social media post from an influencer or investor – can send the price skyrocketing or crashing. The asset class hasn’t been around long enough for us to know how demand will react over the long term to certain news. Therefore, most guess as to the potential impact of any news, and the prices adjust.

We sometimes refer to these news items, and the requisite price reactions, as FUD – fear, uncertainty and doubt. They manifest even more through the 24/7 use of social media to perpetuate and opine on stories and their effect on crypto prices.

When your client contacts you to ask why the price of bitcoin dropped 15% over the weekend, you’ll have to be prepared with a few points.

First, you go back to your original discussion about the volatility of the asset class, and how you have a certain time horizon in mind.

Next, you can address the issue. You should have some thoughts as to why the price moved the way it did.

Last, based on the first two parts of the conversation, you and your client make a determination as to whether to alter their crypto positions.

Store of value, inflation hedge, and more

We are seeing so many opportunities for new valuation metrics and reasons for allocating to digital assets. Bitcoin is the most widely invested and notable cryptocurrency and usually comes with the store-of-value investment thesis.

In financial planning, we usually talk about preparing for some inflation when considering college or retirement accounts. The number planned for most often is around 2% inflation.

However, we haven’t seen real inflation in 15 years, so we have not had to address the issue in regard to a typical portfolio. Now, with recent money printing, inflation is trending up for the first time since the mid 2000′s, and many large bitcoin investors are using it as their investment thesis.

When your clients hear of another hedge fund giant or institutional investor allocating to bitcoin, you have the opportunity to discuss inflation and how bitcoin might be a way to help offset the effects on their expenses. This is the chance to address the real expense needs your clients might face, with a great example of how to solve those needs. You get to educate, and then shine.

Crypto as an investment and medium of exchange

We are used to breaking out client finances into investments and cash. At any time, if the client needs to pay for something, they can use some cash from their bank or cash account, or they have to sell some invested part of their portfolio and wait for the cash.

Crypto, on the other hand, can be used as a medium of exchange, or converted to cash or a stablecoin almost instantly for a very small fee.

For planning purposes, this means advisors and clients will be able to look at investments in digital assets as spendable. Imagine being able to pay for coffee or a car with Apple stock or an international ETF.

Moving forward

Crypto is a new asset class we haven’t seen before. It brings with it all new technologies, risks and opportunities. Your clients who want to participate still expect their advisor to be able to help keep their funds safe and explain how this investment fits their portfolio and their financial lives.

Educating yourself about this new technology is the key to having these conversations about the most exciting asset class we’ve seen in quite some time.


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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Adam Blumberg

Adam Blumberg, CFP ®, is also co-founder and chief educator for Interaxis, a company trying to bridge the education gap between digital assets and traditional finance. He is a contributing writer for CoinDesk’s Crypto for Advisors newsletter.

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