Bringing Crypto Into Client Portfolios

[This article is part of a new series from etf.com highlighting financial advisors.] 

Steve Larsen is founder of Columbia Advisory Partners and co-founder of PlannerDAO and Defi Steward, platforms enhancing cryptocurrency access and efficiency in financial planning. etf.com’s Jeff Benjamin talked with Larsen about the crypto investing space and how he’s helping to expand access to investing in digital currencies. 

etf.com: How are you using ETFs to manage client portfolios? 

Steve Larsen: In our approach to managing client portfolios, ETFs are the primary building block. They expose us to public equities and bond markets, which is essential to a balanced and diversified portfolio.  

We are also increasing our allocations toward alternative investments. More often than not, we prefer private investments over ETFs, as they offer higher returns and lower correlation with traditional public markets. 

etf.com: I know you focus on crypto strategies, but how has your business evolved over the past few years to help other advisors expand into digital assets? 

Larsen: As someone who advises on crypto, I'm passionate about making wealth creation accessible to everyone. Things have changed a lot in recent years, but I still love helping others get into this field.  

I've been focusing on guiding other advisors through the crypto space, which I do through the Certified Digital Asset Advisors designation and using a digital wealth management platform called Defi Steward. 

etf.com: What are your thoughts on the crypto-related funds currently available to investors? 

Larsen: The current market offerings don't align with our firm's investment philosophy. Bitcoin futures ETFs present several issues, and the bitcoin and ethereum Trusts typically have around 2% in fees, which is relatively high for a passive asset.  

etf.com: When do you expect to see the first spot bitcoin ETF, and from which provider? 

Larsen: Predicting the first provider of a spot bitcoin ETF is more about understanding the political landscape than market knowledge.  

BlackRock, due to its substantial political connections and experience in navigating the SEC approval process, is most likely to be the first fund approved.  

As for timing, it will likely be announced quietly on a Friday afternoon to keep the news low key. I'm optimistic about this development and anticipate approval in the fourth quarter of 2023. 

etf.com: Would you advise moving money out of direct crypto ownership and into the spot bitcoin ETFs when they become available? 

Larsen: The best aspects of crypto, such as censorship resistance, decentralization, and permissionless transactions, are only possible with direct ownership.  

Just as you wouldn’t trade your physical ammunition for shares in an ammunition ETF, you shouldn’t readily give up the control that comes with direct crypto ownership.  

Crypto provides a unique form of wealth accessible anywhere in the world, 24/7, offering a safety net in times of uncertainty.