Normalizing Crypto for Advisors and Clients

Onramp Explains Navigating Crypto Volatility With Clients and Educating Advisors on Long-Term Crypto Investing

Julius Buchanan, Senior Contributing Editor, Wealth Solutions Report

A few short months ago, the largest names in crypto, such as Bitcoin and Ethereum, rode a parabolic curve like a rocket to new highs. Prognosticators claimed Bitcoin would breach $100,000 by year-end before touting, “Bitcoin’s nothing though, check this out,” then extolling their favorite coin or token.

The tables temporarily turned against crypto as moonshots morphed into 50% losses, but the crypto community has experienced bear markets many times. In 2013, a tipsy investor reacted to turbulence in a chat forum, accidentally meming the famous mantra “HODL” – hold on for dear life – meaning when markets drop, hold, and wait for the next parabolic move.

Don’t forget cryptoassets when creating your holistic financial plan

Despite extreme moves, crypto is maturing – coins, tokens and blockchains have reached a stage of increased technology and established value propositions that attracts clients interested in long-term investing and incorporating cryptoassets into a holistic financial plan.

This sophisticated investor’s attitude in a volatile downturn differs from do-it-yourself investors. To understand how financial advisors and their clients can reach this level of sophistication regarding cryptoassets, we caught up with Justin Castelli, CFP, Chief of Staff at Onramp Invest.

Justin Castelli, Chief of Staff, Onramp Invest

Crypto Technology, Education and Advocacy

Onramp Invest provides an integration platform as a service (iPaaS) to create access to cryptoassets for RIAs, enabling financial advisors to guide their clients through crypto investing via technology that bridges crypto and standard advisor technology systems and education services that teach advisors about crypto at all levels, from beginner to expert.

Beyond providing technology and education, Onramp advocates for crypto investing within the financial industry. Mr. Castelli and two other Onramp executives recently drafted a 55-page paper demonstrating how crypto belongs in the curriculum of Certified Financial Planner education.

WSR: What’s Onramp’s perspective about the recent significant volatility and downturn in multiple crypto assets in recent weeks? Should investors be worried in the near term or long term with respect to the sustainability of current digital asset valuations? Why or why not?

Castelli: The current volatility in the cryptoasset market should be expected by financial advisors, their clients, and crypto investors in general.

Revisit the Core Four

It’s important for financial advisors to revisit their clients’ Core Four before allocating to cryptoassets – this includes the clients’ risk tolerance, investment policy statement, estate plan and overall financial plan. If these four key components have been properly addressed, advisors and their clients should feel confident in their ability to ride out the volatility we are currently experiencing. 

The volatility in the cryptoasset market also highlights the need for an understanding of the client’s why for investing in cryptoassets and making sure there is enough liquidity in the client’s portfolio to meet short term income needs – just like an advisor would do with traditional asset classes.

Cryptoassets require a long-term horizon view

Anyone allocating to cryptoassets should do so with a long-term horizon and expect to see significant drawdowns with their crypto. If a client or advisor is not comfortable with the volatility, then allocating to cryptoassets should be reevaluated and potentially avoided.

WSR: How can financial advisors who are new to crypto and who have seen the recent downturn in digital asset valuation as a potential buying opportunity for their clients most efficiently and effectively educate themselves about digital assets investing over a compressed timeframe? What are key areas of learning they should focus on?

Castelli: There are numerous resources available for financial advisors looking to learn more about the cryptoasset space. As a company built by financial advisors with multiple CFP professionals on the team, Onramp understands the importance of education first.

Looking to learn more about cryptoassets? Check out Onramp Academy!

This is the reason we built Onramp Academy, which includes written content, videos and tools to help advisors educate themselves on the cryptoasset space, regardless of their background in crypto.

Advisors new to cryptoassets should first educate themselves on the regulatory, compliance and practice management best practices before introducing the asset class to their clients and then dive into the basics of the cryptoasset space. 

Advisors should develop their own educated opinion about the cryptoasset space and be able to explain to their clients why they feel the way they do about the space. If advisors make the decision to allocate to cryptoassets, they should be able to share the due diligence process for the custodians they have chosen, the thesis behind the cryptoassets they have chosen and how they recommend clients store their cryptoassets.

WSR: What advice would you provide to financial advisors who already have their clients in crypto solutions and are now receiving worried or anxious calls from their clients? Are there any key points you would recommend that financial advisors use to help contextualize the state of the crypto markets to their clients?

Castelli: For advisors getting anxious calls from clients, take them back to the Core Four referenced above. Remind them why they have allocated to cryptoassets, how it fits into their financial plan and that the cryptoassets in their portfolio have a long-term horizon in their plan.

Be sure to note the conversation and revisit it when things have recovered to adjust their risk tolerance and portfolio, if necessary. The conversation surrounding cryptoassets should not be that much different than the one an advisor would have with clients regarding their traditional assets.

Depending on how the advisor likes to communicate with clients, consider using graphs, charts, and other visuals to show clients the current volatility is to be expected with cryptoassets – this is not the first time we’ve seen drawdowns like this and it most likely will not be the last.

Clients want honest, proactive communication

Times like now are why it’s important for advisors to be proactive and have these conversations before the market sells off and look to answer the questions clients don’t even know they have. An educated financial advisor is going to be well-equipped to help their clients navigate the volatility seen in the cryptoasset markets. 

Julius Buchanan, Senior Contributing Editor at Wealth Solutions Report, can be reached at

1 comment

Comments are closed.

Related Posts

Sign Up for Our Newsletters

Sign Up for Our Newsletters