As much as $80 billion worth of assets owned by billionaires could be lying in cryptocurrencies
The average Family Office now has invested 1% of its portfolio in cryptocurrency, according to research by Campden Wealth cited in a Forbes article.
Family Offices are wealth management firms that are different from traditional wealth management firms in that they cater to High-Net-Worth Individuals or Families.
Considering the “average Family Office handles $1 billion in family-owned wealth.” Therefore, it could have around $11 million in crypto assets.
As per a 2019 estimate by Campden Wealth, there were around 7300 Single Family Offices in the world. If every single one of them owned crypto assets, the total assets owned by them would be worth $80.3 billion.
“According to CoinMarketCap, $1.9 trillion has been invested in cryptocurrency as of August this year”, as mentioned in the article.
Therefore, Family Offices own around 4.2% of the entire cryptocurrency market.
In North America alone more than one-third of Family Offices hold cryptocurrency.
Good Returns Attract More Investment from Billionaires
“We started allocating a small amount to crypto on the venture side. But, the funds have done so well, going up seven times over the past year, that it’s become a reasonable part of the portfolio”, a CEO of a family office in Connecticut told The North America Family Office report.
Approximately 28% of the Family Offices surveyed by Campden Wealth said that they plan to increase their crypto holdings.
“Initially, we were seeing an allocation of $2 million, $3 million. Tickets are now $5 million to $10 million and we’re seeing some large allocators who are now demanding tens of millions [of dollars worth] as a minimum starting rate.”Anatoly Crachilov, CEO of Nickel Digital, a Digital Asset Manager
Some of Them May Reduce Crypto Holdings
Worldwide, 4% of the Family Offices said they will be reducing their investments in cryptocurrency.
“We don’t view crypto as a currency because it’s way too volatile. How can it be a currency when it fluctuates as much as it does? We’re never going to buy into it”, said a family member of a Family Office in Ohio. “
Some investors fear crackdowns by governments; others fear volatility.
Globally, Family Offices earned an average return of 40% over the past year, as revealed by Rebecca Gooch, Senior Director of Research at Campden Wealth.
The attractive returns delivered by cryptocurrencies, at a time when inflation is threatening people’s savings, have made both retail and institutional investors adopt them. This adoption is also pushing the investors to test out the Decentralized Finance products.
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