A growing number of Asia-based private wealth managers are embracing cryptocurrencies, with some predicting that Bitcoin could reach $100,000 by the end of this year, according to a report from digital asset technology platform Aspen Digital.
The report said that digital assets are becoming a popular investment option among Asia’s private wealth sector, with 76% of family offices and high-net-worth individuals (HNWIs) currently invested in cryptocurrencies.
An additional 16% expressed intentions to enter the market in the near future.
This marks a significant increase compared to Aspen Digital’s previous study in 2022, which reported that 58% of these entities had digital asset exposure, while 34% planned to invest.
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Crypto’s Potential For Higher Return Attract Users
According to the report, most participants identified the potential for higher returns as the primary motivator for investing in cryptocurrencies. Diversification and the appeal of using digital assets as a hedge against inflation also emerged as important factors driving interest.
The survey, conducted in the latter half of this year, involved over 80 family offices and HNWIs. Most respondents managed assets between $10 million and $500 million, with 20% overseeing assets worth $500 million or more.
Aspen Digital: 76% of private equity owners in Asia have already invested in digital assets, with a further 18% planning future investments.
Among those already invested, 70% have allocated less than 5% of their portfolios to digital assets, with some increasing their… pic.twitter.com/Qh97VBMKzh
— CryptoLens.News (@cryptolens_news) October 17, 2024
Decentralized finance (DeFi) remains a key area of interest among these investors, with 67% expressing enthusiasm for its development.
Additionally, 61% showed interest in artificial intelligence and decentralized physical infrastructure networks (DePin), 50% in blockchain infrastructure, and 47% in the tokenization of real-world assets (RWAs).
“We believe every asset class will eventually transition onto the blockchain, capitalizing on the competitive advantages that blockchain technologies offer, representing immense growth potential for DeFi,” Re7 Capital said.
“Currently, approximately 85 million users are engaging with financial services on-chain, and we anticipate this number will surpass 200 million by the end of 2025.”
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Growing Interest for Institutional-Grade Custody Services
The survey also underscored a growing preference for institutional-grade digital asset custody solutions among Asia’s private wealth managers.
Nevertheless, the report revealed that most of these managers still allocate less than 5% of their portfolios to digital assets.
Factors such as the fragmented digital asset landscape, regulatory uncertainty, and poor user experience were cited as key challenges hindering broader adoption.
Nonetheless, 30% of respondents indicated plans to increase their exposure to cryptocurrencies in the future. Some high-net-worth individuals and family offices have already expanded their crypto allocations from less than 5% to over 10% in 2024.
This shift is partly driven by the launch of spot-based Bitcoin and Ether ETFs, which have bolstered investor confidence in the broader cryptocurrency market.
The long-term bullish sentiment among Asia’s private wealth sector remains strong, with 31% of survey respondents expecting bitcoin to reach at least $100,000 by the end of the year.
They cited potential interest rate cuts, the outcomes of the U.S. presidential election, and favorable developments within the crypto industry as the primary catalysts for such a price surge.
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