Bitcoin's rise above US$100,00 and BlackRock's entry into the space has gained the attention of investors worldwide.

While the price of the volatile asset has bounced around, it's also received a bump in coverage from U.S. President Donald Trump, who has promised crypto-friendly reforms

A small percentage of clients at Toronto-based Richardson Wealth hold crypto assets, and it’s not part of the firm’s core portfolio, an advisor at the firm says.

While the firm’s president, Gary Berman, has included bitcoin funds as an option for clients since the first crypto ETF products were rolled out in early 2021, it’s not a major focus.

“We have no plans to change our strategy in the near term,” a spokesperson for the firm said in response to emailed questions.

The Toronto-based firm, which manages about $40 billion in assets for high-net-worth clients, undertook a full due diligence review and added most new products to its shelf.

“But with more complex funds and asset classes, we reserve the right to review and block them from sale if we are uncomfortable with the associated risks, even if the issuer has other funds on our platform,” the firm said. “At this point, from a general risk perspective, the decision has been to only have exposure to ETFs in this asset class.”

Most independent dealers don’t address crypto publicly, or state whether they offer clients access to crypto funds.

However, CI Global Asset Management says there are 16 investment dealers that allow their advisors to sell CI Galaxy crypto funds. The firm has partnered with Galaxy Digital Capital Management to offer crypto ETFs. It also has a blockchain index fund.

Firms have their own evaluation process when it comes to new products, said Jennifer Sinopoli, executive vice-president and head of distribution at CI Global Asset Management.

“They all have their own due diligence process, their own risk-rating process and their own resources [to] evaluate the suitability of that product being on their shelf and being made available to investors.”

Any CIRO-licensed advisor can invest clients in crypto ETFs — if their firm allows it, Sinopoli noted. MFDA-licensed advisors need to pass a proficiency requirement set by the dealer.

Even if their firm allows it, many advisors and portfolio managers steer clear of crypto, said Noah Billick, a partner with crypto and blockchain specialty law firm Renno & Co. in Montreal, and director of regulatory, funds and compliance at the firm. His clients include digital asset manager 3iQ.

“Many discretionary portfolio managers will not touch crypto, don’t understand it, don’t believe in it,” Billick said. “It’s still far from being widely adopted, but I think that it is growing. More and more advisors are starting to at least dabble in it.”

In addition to regular know-your-client and know-your-product compliance requirements, some firms have a non-solicitation component that precludes advisors from discussing digital assets with clients unless the client initiates the discussion.

According to an OSC staff notice in mid-2023, all existing crypto ETFs and mutual funds are classified as alternative mutual funds. The Canadian Securities Administrators has proposed to classify all new crypto funds in the same way — that proposal, released Jan. 18, is out for comment until April 17.

“There are a lot of places where it just hasn’t been approved or it’s approved on an exception basis,” Billick said, noting that while clients can’t buy crypto funds through their bank advisor, investors can access it through self-directed investing accounts with the banks’ discount brokerages.

Fear of new products is holding back some firms and advisors from getting into the space, said Wellington-Altus Private Wealth’s chief market strategist, Jim Thorne.

“This is exactly the same as the 1990s, when the [retail] investor bought Microsoft before the broker felt comfortable introducing it into their asset allocation program because of the view of new innovative products by their institution and the compliance department,” he said.

In 2017, the Ontario Securities Commission published a staff notice that outlined the expectation for firms to register for a change of registration in order to sell crypto funds, Billick noted.

But Billick said some firms offer it without being registered to do so.

“As a portfolio manager myself, I would not have necessarily thought that I needed to go to the regulator to get their permission to advise my clients to buy a small amount of a prospectus-qualified product if it was otherwise suitable for them,” said Billick, who was licensed as a portfolio manager from 2018 to early 2023. “To me, that’s a strange thing.”

At the start of 2021, the first bitcoin ETFs from Harvest Portfolios Group and Purpose Investments began trading in Canada.

Earlier, 3iQ's closed-end bitcoin fund was listed on the TSX in 2020.

Harvest’s iHarvest Bitcoin ETF (TSX: BTC.B) and Purpose’s Bitcoin ETF (TSX: BTCC) were approved by the Ontario Securities Commission.

Harvest’