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Indian family offices and high net worth individuals are joining the crypto movement in droves. For their part, crypto exchanges welcome them with personalized services.
Crypto exchanges and funds have seen an increase in investment – up to Rs 1 crore – by family offices and high net worth individuals, amid growing global institutional acceptance of cryptocurrency.
WazirX, India’s largest crypto exchange by volume, recently created a dedicated over-the-counter (OTC) team that executes high-value bulk trades to meet the growing demand from high net worth individuals to procure crypto.
These people allocate 3% to 5% of their wallets to crypto, with bitcoin being the most popular, said Nischal Shetty, CEO of WazirX.
The number of HNIs has been higher than in the past 8 to 12 months, compared to the past two years, Shetty said. I think they all want exposure because they believe in hedging and a diverse portfolio.
According to Siddharth Menon, COO of WazirX, the platform has seen the number of user registrations increase 30 times by HNIs and family offices who trade over $ 25 million per month or wish to purchase cryptos valued at over $ 100,000.
These funds benefit from specialized services, including personalized trading reports and tax and compliance support.
ZebPay, another crypto exchange, started offering OTC services last year.
It offers personalized service to institutions and individuals who wish to purchase a minimum of 5 bitcoins, which at current rates cost $ 150,000 or more than Rs 1 crore.
The exchange executes multi-million dollar trades every month, its chief operating officer Vikram Rangala told ET.
It is growing quite strongly in India. Family offices are also looking to diversify into crypto. They may have started with holdings of blue chip stocks and then gold. But now a lot of them come to us looking for bitcoin, Rangala said.
Going forward, ZebPay wants to offer a full wealth management service to high net worth clients to help them build a diverse portfolio of digital assets, including non-fungible token (NFT) art collectibles.
Licensed advisers and wealth managers are reluctant to offer formal advice to clients in the absence of cryptocurrency regulations in India, making it a legal gray area.
In the absence of formal advice, the wealth advisers who manage the family office investment portfolio train themselves by taking crypto courses.
Most of the exchanges that integrate these clients offer round-the-clock support, a dedicated relationship manager, and personal involvement and guidance from senior leaders during those exchanges.
According to a recent report by PriceWaterhouseCoopers, the total assets under management of crypto hedge funds grew by 90% in 2020 globally, with the vast majority of investors in the funds being either HNIs or family offices.
Several industry experts have said that over the past year, wealthy investors have started to view bitcoin as a serious asset class, meaning they view it as a long-term investment.
Sachin Jain, co-founder of Amesten Capital, said crypto has come a long way since 2017, when serious investors with an appetite for risk saw it as a quick return system.
People no longer see it as speculation. The same people see it as a future currency or store of value, said Jain, who offers portfolio management services to HNIs and institutions, and has around $ 15 million in assets under management.
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