Key Points
- 35% of family offices plan to increase their digital asset exposure according to a UBS report.
- Family offices invest in digital assets for various reasons, including a belief in the power of blockchain technology and diversification of portfolios
In a recent report by UBS Global Family Office, it has been revealed that American crypto is not dead. In fact, it seems to be thriving. The report disclosed that 35% of family offices, who cater to ultra-high-net-worth investors, plan to increase their digital asset exposure. This is a positive development for the crypto industry, which has been grappling with regulatory scrutiny and market volatility in recent times.
Family offices are renowned for their conservative investment strategies, but they have been increasingly interested in digital assets in recent years. These private wealth management advisory firms manage the financial affairs of wealthy families, including investments, taxes, and estate planning. The fact that they are venturing into the crypto world indicates the growing acceptance of digital assets as a legitimate investment option.
If you think crypto is dead under the current US regulatory FUD, here’s some perspective.
Here’s a page out of the 2023 UBS report on family offices (minimum bar is $50m-$100m of investable assets).
35% plan to increase digital asset exposure, while 5% plan to decrease. pic.twitter.com/F2xwdycdZg
— Willy Woo (@woonomic) June 15, 2023
About the UBS Report
The report, published on May 31, has revealed that the investor class is currently experiencing “the biggest shift in strategic asset allocation for several years.” The report, which gathered insights from 230 family offices worldwide with an average total net worth of $2.2 billion, provided some noteworthy findings. One of the most interesting observations was that 27% of family offices plan on investing in cryptocurrencies this year. What’s more, around a quarter of them are looking into decentralized finance (DeFi) investments, highlighting the growing trend of alternative investments in the space.
When it comes to preferred investment opportunities, the report revealed that digital exchanges or tokenization platforms are the top choices for 21% of the family offices surveyed. With such an elite group of investors showing interest in the space, it’s clear that cryptocurrency and blockchain are becoming increasingly mainstream.
The world of institutional investment has been buzzing with excitement this week, as BlackRock – the largest asset manager in the world – filed for a Bitcoin exchange-traded fund. This move has certainly added to the growing narrative that digital assets are a valuable addition to traditional investment portfolios, with a recent survey by Nomura revealing that 96% of professional investors view them as a promising diversification opportunity.
Other Reports with Shows Decline
Goldman Sachs also released a report on May 8th which found that around 32% of the family offices might have investments in digital assets such as cryptocurrencies, DeFi, blockchain and so on. However, not all reports are as positive about family office interest in crypto.
This report also reveals a significant decline in the appeal of potential cryptocurrency investments in 2022. The report shows that only 12% of investors expressed interest in crypto investments, marking a sharp decline from the 45% who showed interest in 2021.
Similarly, a report from Institutional Investor suggests that few family offices are planning to invest in cryptocurrencies, with only 26% having invested in crypto, up from 16% in 2021. It remains to be seen how these conflicting reports will shape the future of institutional investment in digital assets.
End Note
The UBS report has uncovered some interesting trends in the world of finance. It seems that family offices are becoming more and more interested in impact investing – a practice where investors put their money into companies and projects that make a positive social or environmental impact. This is great news for the crypto industry, which has been championing the use of blockchain technology for similar causes.
But that’s not all. The report also revealed that the American crypto scene is still very much alive and kicking. Despite the recent challenges faced by the industry, such as regulatory scrutiny and market volatility, around 35% of family offices have plans to increase their digital asset exposure. This is a positive indication that wealthy investors still believe in the potential of digital assets, and are willing to take risks for potentially high rewards.