Asian family offices are buying cryptocurrencies as weak returns from traditional portfolios make digital assets attractive despite months of market turmoil.
Interest from investment managers suggests there are still new buyers. Cryptocurrency After the collapse of the digital asset price boom of 2020 and 2021, Bitcoin, Ethereum and other
some family offices and wealthy individuals Hong Kong He said the fall in digital asset prices this year has to take into account the poor performance of local stock and property markets.
After experiencing volatility in the first half of this year, cryptocurrency prices are Flat out recentlyIt has sparked speculation as to whether it has bottomed out. Investors said the asset continues to be an attractive hedge against broader market turmoil.
“We never lost interest [crypto]said Keith Wong, Chief Executive Officer of Winland Wealth Management, a multi-family office based in Hong Kong. “We see it as diversification and a separate asset class.”
A survey of 30 family offices and wealthy investors in Hong Kong and Singapore released Monday by KPMG China and cryptocurrency group Aspen Digital found 92% of respondents were interested in digital assets. 58% have already invested and 34% have already invested. I am planning to do so.
More than 60% of respondents were family offices or individuals managing assets worth between $10 million and $500 million, according to the report.
Bitcoin, the world’s largest cryptocurrency, has fallen about 70% from its peak in November 2021 and has been trading between $18,000 and $25,000 since June. Ether, the next largest coin by market capitalization, is down about 60% to date.
But Hong Kong’s traditional asset classes have also taken a hit this year, with Hong Kong stocks underperforming US and European stocks. The benchmark Hang Seng Index has fallen more than 30% this year, hit by geopolitical tensions and repeated coronavirus lockdowns in mainland China.
The urban housing market is dropped to the lowest level Since the financial crisis of 2008, restrictions due to the coronavirus and successive increases in interest rates have continued.
“all [my] A friend with a family office says they have moved. . . to other things, such as having an art portfolio. . . Hong Kong’s wealthy investor added that the property sector is “really stagnant”.
Family offices are in focus as Hong Kong crypto firms lobby regulators for licensing requirements that take effect in March. The industry fears the rules will make it inaccessible to retail investors.
“For the average wealthy… Eric Wong, managing director of Bricks and Mortar Management, a multi-family office based in Hong Kong, cuts it in half and removes it from the precious metal can be allocated to virtual currency.
Hong Kong-based Raffles Family Office has formed a joint venture with cryptocurrency company Fobitec to address the ‘unmet’ need of the ultra-high net worth to invest in digital assets. C Capital, an asset management firm founded by Hong Kong mogul Adrian Cheng, plans to raise around $200 million over the next 18 months to invest in blockchain assets.
Advisors say digital assets are facing a generational divide, with crypto firms seeking to tap “old money” from individuals who are more resilient to new asset classes.
“For example…the other day I was sitting with my family…they don’t know anything about cryptocurrency and their kids are asking about it,” said Winland Wealth’s Wong.
Longer term, this generational dynamic will bring more crypto buyers “from the older side of the population pyramid,” said Bricks and Mortar’s Wong.