Asian Private Wealth Managers Embrace Crypto, Some Foresee Bitcoin at $100K By Year-End

As a seasoned analyst with over two decades of experience in the financial industry, I’ve witnessed the ebb and flow of various asset classes. The latest report by Aspen Digital, which indicates a significant surge in crypto exposure among family offices and high-net-worth individuals in Asia, piques my interest.

An increasing amount of private wealth managers based in Asia are venturing into the cryptocurrency sector, as some experts predict that the price of Bitcoin (BTC) may reach $100,000 before the year is over, according to a report from Aspen Digital, a digital asset technology platform.

In Asia, digital assets are becoming a popular choice for alternate investments among wealthy families and individuals, as shown by the fact that 76% currently invest in cryptocurrencies, with an additional 16% considering it for future investment.

The current data shows a significant enhancement compared to last year’s study in 2022, where it was found that 58% had experience with digital assets and 34% intended to invest. Now, the numbers suggest a higher percentage of involvement and intention in this area.

According to the report provided to CoinDesk, many participants pointed out that higher earnings are their main reason for investing, while more and more participants are also motivated by the benefits of diversification and protection against inflation when it comes to investing in digital assets.

This year’s research was carried out by surveying over 80 family offices and wealthy individuals during the latter part of the year. The majority of the respondents managed assets worth between $10 million and $500 million, with 20% reporting assets of $500 million or more. The study features insights from SBI Digital Markets and the Family Office Association of Hong Kong.

Interest in Decentralized Finance (DeFi) continued to be high, as 67% of participants expressed enthusiasm for DeFi projects. This was closely followed by 61% who showed interest in Artificial Intelligence and Decentralized Physical Infrastructure Network (DePin), 50% in the development of blockchain infrastructure, 47% in the tokenization of real-world assets (RWA).

Re7 Capital predicts that all types of assets will move onto blockchain platforms, leveraging the benefits unique to blockchain technology, which could lead to significant growth in DeFi. At present, about 85 million people are utilizing financial services through blockchain, and it’s expected that this number will exceed 200 million by 2025.

One respondent pointed to the ease of trading memecoins on Ethereum‘s rival Solana, while another manager called liquid restaking tokens (LRT) “too complex” to take the exposure.

The survey also highlighted a preference for institutional-grade digital asset custody.

Market outlook

In simpler terms, about one third of those in the private wealth industry believe that the price of Bitcoin will reach or exceed $100,000 before the end of this year’s final quarter.

As a crypto investor, I’ve noticed that positive factors like decreased interest rates, the outcomes of the U.S. presidential election, and advancements within the crypto industry itself have been driving forces behind the market’s upward momentum.

Muted allocation

Although they’re hopeful, most private wealth managers typically invest less than 5% of their total investment in digital assets.

The report cited the fragmented nature of the digital asset landscape, regulatory uncertainty and poor user experience as critical obstacles for widespread adoption.

Speaking as a cryptocurrency investor, it’s encouraging to note that about one-third of surveyed individuals share my optimism for expanding our investments in the future. Furthermore, some wealthy individuals and family offices have already amplified their crypto holdings significantly, increasing them from around 5% to over 10%, as they aim to tap into the wider digital asset market. This surge comes following the launch of spot-based Bitcoin and Ethereum ETFs, which could potentially broaden investment opportunities in the crypto space.