Wealthy investors aren’t frozen by the crypto winter

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The crypto crash hasn’t dampened demand for digital assets, with four out of five high net worth individuals (HNWIs) and family offices having already invested in them.

According to a new study from Longitude Research and Matrixport, which covered single and multi-family offices, HNWIs and MAIs in Singapore, Hong Kong, Taiwan, Australia and the UK.

The study found that 80% of HNWIs and 70% of family offices said they were very or very interested in digital assets, with less than 7% of HNWIs and only 10% of family offices saying they were not interested in investing in digital. assets.

These sentiments remained largely unchanged even after a significant decline in the market capitalization of digital assets following the collapse of Terra Luna in May 2022.

“Despite the bleak market outlook, we continued to see an influx of large investors into digital assets,” said Eugene Lim, head of private wealth at Matrixport, a digital asset manager.

The majority of investors surveyed, who held up to 25% or more of their assets in digital assets, said their investment strategies matured as they became more familiar with digital assets. They were looking for a wider range of investment products suitable for different risk profiles.

The survey also revealed that mass adoption would be possible with the entry of long-term investors, traditional financial institutions offering digital asset services, and an increase in digital asset use cases.

Investors saw digital assets as a way to build “more resilient portfolios”, with some indicating they were driven by the potential that digital assets could offer better returns than traditional assets, he said. he adds.

However, investors cited major obstacles to investing, including fraud risk, cybersecurity risks, market volatility and lack of understanding of the asset class.

The study also revealed several “push factors” driving demand for crypto caused in part by traditional finance, including the perceived abuse of government control through the banking system and the debasement of currencies. paper.

Nearly half of investors expect most assets to be digital in the future, and regulation would help stabilize the market.

“With one in three investors admitting to investing in digital assets without fully understanding the assets, the importance of guidance and education highlights this aspect,” the study says.

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