- The vast majority of family offices are likely to invest in cryptocurrencies in the near future.
- Financial institutions will increasingly cater to the cryptocurrency appetite of family offices, which will bring in additional capital to the space.
- As younger generations take over family offices, they are more likely to increase their portfolio allocation to cryptocurrencies.
Zug, Switzerland, 4 March 2022: Numbrs Personal Finance AG (“Numbrs”), a Swiss Bitcoin Company based in Zug, Switzerland, is pleased to release this exclusive research on how family offices – a private firm dedicated to the wealth management of an ultra-high-net-worth family – are increasingly considering Bitcoin as a means of securing their wealth in the long term.
A global survey conducted by BNY Mellon Wealth Management found that 77% of its family-office clients had either invested in cryptocurrencies or were exploring the possibility of doing so. The survey covered 200 family offices with more than $150m in assets each. The results of the survey provide very encouraging news for the sector as a whole and for Bitcoin in particular. Family offices are usually conservative and risk averse in their investment strategies, as they aim to preserve wealth across generations.
One of the important themes the BNY survey covers is the different investment outlooks across generations. As with the general population, younger generations in family offices are far more open to cryptocurrencies as an investment. 64% of BNY respondents said that cryptocurrency investments spoke to younger generations in particular and 45% cited this factor as the reason why they invested in the sector in the first place. 86% of respondents also thought that younger generations would be more likely to engage in DeFi.
According to one estimate, family offices currently have 1% of their portfolios invested in cryptocurrencies and own 4% of all cryptocurrencies. With time, as younger generations take over the running of family offices, the proportion of portfolios allocated to cryptocurrencies is likely to increase. This has the potential of bringing vast amounts of capital into the cryptocurrency space.
Another encouraging trend in the BNY survey is that 72% of the family offices that have already invested in cryptocurrencies, say they intend to further increase their exposure in the next 1-2 years and 61% think that cryptocurrencies are good investment opportunities. As a vast majority of family offices are satisfied with their crypto investments, they are likely to encourage others to invest in the space and to help grow the ecosystem. This will lead cryptocurrencies, and Bitcoin in particular, to become even more mainstream in investment circles. It will also begin a virtuous competitive cycle among financial institutions, who will outdo each other to provide clients with the most attractive crypto-related products. This means a snowball effect could result and even more capital would enter the space.
Family offices are notoriously conservative investors. Their massive entry into the cryptocurrency space is excellent news and signals the mainstreaming of cryptocurrencies in the investment world. It is likely that Bitcoin will take the lion’s share of investments originating from family offices due to its track record, leading position and high brand recognition. Family offices looking for innovative ways to store and grow their wealth, as well as those looking for diversification will increasingly flock to Bitcoin. The idea of Bitcoin as an “exotic” or high-risk investment will eventually wane and it will become an increasing part of all well-diversified investment portfolios. And who knows, it may even overtake fiat and fiat-denominated investments.
Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.
Numbrs Personal Finance AG (“Numbrs”) is a premium cryptocurrency solutions group founded in 2013 by Martin Saidler and headquartered in Zug, Switzerland. The group provides a state-of-the-art Bitcoin storage account, the ‘Numbrs Bitcoin Account’, which guarantees an industry-leading and highly secure storage solution for Bitcoin custody and private wealth preservation for the 21st century. The Numbrs Bitcoin Account has been created in the spirit of Switzerland’s long traditions of strict standards of privacy, neutrality and stability.