Recently, Goldman Sachs released its report on Family Office Investment Insights, featuring investors’ interest in digital assets and blockchain technology. Reportedly, 32% of family offices are currently investing in digital assets.
Family offices are investment funds that manage the financial assets of a family. They operate in a similar manner to standard investment funds but with more flexibility toward the needs of their sole principal.
According to the report, family offices invest not only in cryptocurrencies but also in blockchain technology. They have an interest in diverse fields including stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi), and blockchain-focused funds.
Reportedly, the second Goldman Sachs Family Office Investment Insights Report, fielded January 17-February 23, 2023, surveyed 166 institutional family offices with a net worth of at least $500 million (93%), 72% having at least $1 billion.
The report reveals that family offices are becoming more confident in investing in cryptocurrencies as the proportion of crypto investors has risen from 16% in 2021 to 26% as of now in 2023.
However, the number of family offices not invested in cryptocurrencies and showing no interest in the future has increased from 39% to 62%. The graph below represents the investors who have invested in crypto in light blue, investors not interested in crypto in a shade darker than that and the darkest blue represents the ones who can be interested in the future.
Notably, the number of investors who can be potentially interested in investing at some point in the future has fallen from 45% to 12%. Family offices have solidified their opinions on cryptocurrencies, with a larger proportion now invested in this asset class.
However, there appears to be a shift towards a more polarized view. A growing number of family offices are showing no interest in investing in cryptocurrencies in the future. This trend signifies that while some investors are increasingly confident about cryptocurrencies, others remain hesitant.
Considering the global trend wherein major economies like the U.S., U.K., and India have imposed a certain degree of legislative limits, a large portion of this cynicism may stem from the absence of laws in the sector. Recently, India recommended a uniform framework for G20 nations to deal with cryptocurrencies.
As per the global investment data featured in the research, only 4-5% of investors include crypto assets in their “other” investments. On the other hand, over 30% of investors select public market equities as their primary investment choice.
Both for 2021 and 2023, the average asset allocation of respondents from throughout the world comprises investments in cash and cash equivalents and fixed income. Notably, 35% of respondents said they would cut back on their allocation to cash and cash equivalents during the coming year.
In addition to highlighting new disruptive technologies like artificial intelligence (AI), machine learning, and digital assets, the research also emphasizes a growing interest in digital consumption due to a change in consumer behavior.
This pattern suggests that investors are more interested in creative investment possibilities for portfolio diversification and increasing returns. Meanwhile, the report suggests that family offices are closely monitoring the developments within the digital-asset sector. As per data, most family offices (19%) are reportedly optimistic about the future of blockchain technology.
Of the family offices invested in digital assets, 9% view crypto investments as a means of diversifying their investment portfolios, while 8% see them as a store of value. With the increasing prominence of blockchain technology and cryptocurrencies, entities across the globe have become more interested in the topic.
Goldman Sachs has also taken steps to help clients who wish to engage with cryptocurrencies. The agency announced a program, known as Datonomy, to assist institutional investors unfamiliar with the market. The website would describe and organize cryptocurrencies available to institutional clients.