Spot Bitcoin ETFs and other SEC Registered Crypto Assets

 

On January 10, 2024 the SEC approved the registration of several Spot Bitcoin ETFs. Although the SEC has approved the registration of these new products, they have indicated that they still view the cryptocurrency market as largely unregulated, speculative and volatile.  Therefore, Mutual Advisors, LLC (Mutual) is updating our Cryptocurrency Policy to account for these changes.

 

It is important to keep in mind that Bitcoin has been more than twice as volatile as the S&P 500 and more than ten times as volatile as the US dollar.  Additionally, its correlation to equity markets has fluctuated over time, making it difficult to predict if it can act as a hedge against market declines.  Cryptocurrency backed assets may not be appropriate for all investors.  Any advice regarding cryptocurrency should be used as part of a defined asset allocation strategy which accounts for a client’s specific risk tolerance and investment objectives.

 

Mutual has taken this into account when updating our below cryptocurrency policy.

 

Updated Cryptocurrency Policy:

Mutual prohibits its IARs from providing advisory advice regarding investments in crypto-currency (e.g. Bitcoin), initial coin offerings (“ICOs”), or other crypto-currency products, except for ETFs or closed-end funds that have been registered with the SEC (collectively “registered crypto-fund assets”). Mutual limits the holding of these registered crypto-fund assets to 10% of the client household value. If clients are found to hold more than 10% in their portfolio, the IAR will be required to reduce the amount of the holding in the portfolio. If the client does not want to reduce the amount of registered crypto-fund assets in their portfolio, then they will be required to sign a risk acknowledgement form.

 

It is anticipated that additional crypto-backed ETFs and closed-end products will be registered by the SEC in the future. If there are any questions on the specific products that are available to clients, please contact Compliance by opening a case from the Power Portal.