Despite facing increasing regulatory scrutiny and government hostility towards cryptocurrencies, family offices and institutions in the United States remain undeterred, with a significant number planning to increase their exposure to digital assets. A recent UBS Global Family Office Report 2023 revealed that more than a third of family offices in America are eager to embrace cryptocurrencies, indicating a significant shift in strategic asset allocation within this investor class.
The report, based on a survey of 230 family offices worldwide, with an average total net worth of $2.2 billion, highlighted the growing interest in digital assets. It noted that 35% of family offices in America plan to expand their digital asset exposure, marking the largest shift in strategic asset allocation seen in several years.
Moreover, the report revealed that 27% of family offices intend to invest specifically in cryptocurrencies this year, recognizing the potential for significant returns in this volatile but promising market. Additionally, approximately a quarter of these wealthy investors expressed interest in decentralized finance (DeFi) investments, underscoring their willingness to explore innovative financial solutions.
When it comes to investment opportunities, digital exchanges and tokenization platforms have garnered the favor of 21% of family offices polled. This preference suggests a growing inclination among investors to explore the possibilities of blockchain technology and its potential to revolutionize traditional financial systems.
The increasing interest in cryptocurrencies and digital assets extends beyond family offices. Nomura, a Japanese banking giant, conducted a survey revealing that an astounding 96% of professional investors view digital assets as a means to diversify their investment portfolios. This sentiment echoes a broader recognition among investors that digital assets can complement traditional asset classes such as fixed income, cash, equities, and commodities.
The institutional investment narrative received a significant boost recently when BlackRock, the world’s largest asset manager, filed for a spot Bitcoin exchange-traded fund (ETF). This move further validates the growing acceptance of cryptocurrencies within mainstream financial circles.
While the crypto markets have experienced a downturn, currently down 65% from their peak levels in November 2021, the strong commitment from family offices and institutions to increase their exposure to digital assets suggests a potential resurgence. The bullish sentiment displayed by these influential investors hints at a brighter future for the American crypto sector despite ongoing regulatory challenges.
The UBS report and other surveys indicate that wealthy investors are recognizing the long-term value and potential of cryptocurrencies, stablecoins, non-fungible tokens (NFTs), and DeFi investments. Their growing involvement in the crypto space could not only drive market recovery but also pave the way for broader adoption and integration of digital assets into traditional financial systems. As the appetite for cryptocurrencies remains resilient among family offices and institutions, it becomes increasingly clear that the allure of digital assets continues to captivate investors, promising a transformative impact on the future of finance.