According to the most recent data from the global wealth managers survey from GlobalData released on October 13, high-net-worth investors (HNW investors) are still interested in investing directly in the crypto asset class. At the same time, more significant financial organizations like Fidelity and Charles Schwab are increasingly embracing cryptocurrency and launching crypto exchange-traded funds as a result (ETFs).
The average global HNW portfolio only comprises 1.4% crypto, according to Sergel Woldemichael, Senior Wealth Management Analyst at GlobalData. Although the demand is anticipated to increase in the future, investors are hesitant to allocate a large portion of their portfolio to cryptocurrencies.
The significant portion of HNW crypto investors who prefer to invest directly in cryptocurrency is being missed by investors who are primarily focused on crypto ETFs, according to Woldemichael. Wealthy investors are drawn to this asset class because of the potential for higher returns; since it makes up only a tiny fraction of their portfolio, they are inclined to take the entire risk.
As a result, well-known and new companies are already providing consumer protection in the form of cryptocurrency funds or ETFs, such as Bitcoin ETFs. ETFs additionally offer investors safety, decreasing the possibility that their accounts will be compromised or losing money because they forgot their passwords.
Currently, almost 21,000 different cryptocurrencies are available on the market, giving investors a broad range of assets. The most significant gain is in direct investment, which also has the highest risk compared to other securities.