By David Conti

Just as some financial advisors were starting to view crypto as a viable tool for building diversified portfolios, the market delivered a sharp reminder of its volatility. Bitcoin's nearly 50% drop from its October 2025 high has reignited debate inside advisory firms about risk tolerance, suitability, and whether recent optimism ran ahead of fundamentals.

For skeptics, the pullback feels like vindication. For cautious adopters, it's a real-time stress test of allocation discipline. Meanwhile, the underlying debate among financial advisors rages on, even as ETF adoption pushes more advisors to examine crypto through a traditional portfolio lens.

The pro and con sides don't break down by age or by technology know-how. Instead, advisors are split between those who view crypto as an emerging asset that can be evaluated alongside alternatives and those who see it as a purely speculative asset.

Carefully adding crypto. A recent survey of financial advisors conducted by Bitwise and VettaFi points to a slow shift in how professionals are approaching crypto. Personal ownership among advisors is at its highest level since the survey began, with more than half reporting crypto exposure in their own portfolios. Client allocations are also edging higher.

Advisors surveyed show a clear preference for diversified index-style exposure over single-currency bets. Funding for crypto positions most often comes from equities or cash rather than defensive assets. Looking ahead, interest is strongest in regulated crypto equity ETFs, underscoring a continued tilt toward vehicles that fit more comfortably within traditional portfolio frameworks, the survey shows.

Before the launch of spot Bitcoin ETFs in 2024, allocating to crypto in client accounts was rare -- and professionally risky. "You were really sticking your neck out," says Bitwise Chief Investment Officer Matt Hougan. "That's completely changed. Bitcoin ETFs normalized crypto. Today, buying bitcoin or another crypto asset is not that different from investing in commodities, private credit, or other alternative investments."

Setting limits. The other meaningful shift is allocation size. A few years ago, advisors who did allocate to cryptocurrencies typically capped exposure around 1%. Today, 2% to 5% allocations are common.

"That's mostly because crypto has become less risky from a regulatory, custody, access, and adoption perspective," Hougan says. "When there's less risk, there's more room to allocate."

That doesn't mean advisors see crypto as safe -- only safer than it once was.

Even among advisors who see opportunity, expectations remain grounded. Lance Roberts, chief investment strategist at RIA Advisors in Houston, says crypto's legitimacy as an asset class came late -- and with caveats.

"At first, crypto was very speculative," Roberts says. But the ETFs changed that. "It finally became an asset class -- but a very speculative one that continues to move up and down."

Roberts doesn't view Bitcoin as a safe haven akin to gold or Treasuries. "Bitcoin tends to move with the Nasdaq and broader market liquidity, especially when driven by Federal Reserve policy," he says. "Gold and silver don't behave that way. That tells us crypto is more risk-on than defensive."

That framing shapes how Roberts manages exposure. He warns against narrative-driven investing -- whether in AI, biotech, or crypto -- when prices run far ahead of fundamentals. "These stories can work for a while," Roberts says, "but they tend to end the same way once liquidity tightens."

Roberts emphasizes active risk management, including trimming or taking profits when crypto rallies sharply. "Volatile assets demand discipline, " he says. "Otherwise, they end up managing the investor instead of the portfolio."

Client fit. For many advisors, the key question is not whether crypto belongs in client portfolios -- but in which ones. Barron's Advisor Hall of Famer Lori Van Dusen, founder and CEO of LVW Advisors, has invested in crypto for more than five years and sees it through a generational lens.

"We help clients understand and value this emerging asset class," she says. "But client education takes time. More importantly, we have to ensure there's a client fit."

Van Dusen describes crypto as a "mature venture investment," emphasizing the breadth of risks involved: capital, market, regulatory, custody, and liquidity. "We give clients our opinion on whether it makes sense for them," she explains. "And sometimes the answer is no."

For some families, however, crypto plays a strategic role. "We have clients who view it as part of a multigenerational wealth strategy," she says.

Dinon Hughes, a 25-year-old partner at Portsmouth, N.H.-based Nvest, grew up alongside crypto's rise. While he acknowledges the lack of industry consensus around classification, his team approaches crypto as a distinct digital asset rather than forcing it into traditional buckets.

"Our investment team views crypto as a unique digital currency rather than fitting it neatly into commodities or securities," Hughes says. "While the broker-dealer world historically viewed crypto negatively due to regulatory concerns, we see potential when used thoughtfully as an alternative asset."

Plus, familiarity with crypto can be useful when engaging younger clients and next-generation heirs to family wealth. "Crypto may become a way to engage G2 and G3 in family money conversations over time," Hughes says. "It's not the whole conversation -- but it can be an entry point."

My perspective. I first met Matt Hougan in 2022 at a crypto conference. Around that time, I invested $5,000 in a Bitwise crypto product, and roughly doubled my money until the recent crypto selloff. I've learned to endure the volatility along the way. Crypto investing today is far more accessible. But that doesn't mean it's for everyone.

If you're younger or simply have true "play money," crypto may deserve a place in a diversified portfolio. What I struggle with are the thousands of altcoins with no clear economic foundation. The risks there are simply too high.

It's telling that firms like Fidelity, BlackRock, and Franklin Templeton focus on Bitcoin, Ethereum, Solana, and a narrow set of assets. It may sound boring -- but boring often survives.

A friend recently called crypto "a young person's game." I tend to agree. For retirees, crypto generally only makes sense for those with high risk tolerance and the emotional fortitude to watch prices swing week after week.

Over time, I think the factor that will drive the success and acceptance of crypto is education -- of advisors and clients alike. That will determine whether crypto becomes a durable portfolio component or remains a recurring source of regret.

"Crypto's future has always depended on what financial advisors think of it," Hougan says. "They are trusted guides to millions of families and responsible for stewarding trillions of dollars in wealth."

My advice is to maintain discipline: Size it right, document it clearly, and assume volatility will show up.

David Conti , CPRC, is a New Hampshire-based retirement coach at RetireMentors, with over 20 years of experience in retirement planning. He spent 17 years in financial communications at Fidelity Investments, where he served as the personal finance and retirement editor for Fidelity Viewpoints.

Editor's note: Guest commentaries like this one are written by authors outside the Barron's Advisor newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to advisor.editors@barrons.com .

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February 09, 2026 16:10 ET (21:10 GMT)

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