When crypto winter ends and investment activity blossoms once again in the digital assets space, financial advisors should be prepared to hear a new litany of questions from clients about the risks and opportunities in cryptocurrencies.
Advisors are warned by the Certified Financial Planner Board of Standards (CFP Board) and the Chartered Financial Analyst Institute (CFA Institute) to look before they leap.
Decisions to recommend bitcoin should depend on an advisor's crypto competency and a client’s personal/financial circumstances, the CFP Board’s notice rightly says.
Coming off euphoric highs of the year before, the crypto market has endured an environment of tightening monetary policy, which led to sell-offs, implosions of projects like Terra, bankruptcy filings of CeFi companies including Celsius Network and Voyager Digital and the climactic downfall of the FTX exchange.