How Much Are the Ultra Rich Investing in Bitcoin and Cryptocurrencies?
Despite the turbulence in the cryptocurrency markets since the turn of 2018, many of the ultra-rich still see this as an opportunity to further their holdings. The significant dips were thus welcomed by many as it provided a discounted price for them to load up on their positions further.
Survey on Crypto Bag Holders
Many people are interested to hear the ultra-rich are putting their money and how much of it is going towards cryptocurrencies. An annual survey of private bankers and wealth advisers provides a glimpse into which areas these investments are being made.
One of the key statistics coming out of this survey is that 21 percent of respondents confirmed that their clients invested further in cryptocurrencies during 2017.
The team that generated this survey are from Knight Frank, and it is called The Wealth Report.
There were responses from over 500 wealth advisers and private bankers who in total represent approximately 50,000 clients that have a cumulative wealth that amounts to over $3 trillion.
Therefore, the results of this survey are usually a good indicator as to where such a wealthy demographic are making investments and upon what areas they are curtailing their focus.
The geographical breakdown of the document’s results showcases vastly differing approaches that the ultra-rich take with cryptocurrencies. Only an additional five percent of investors in Asia, for instance, exposed themselves to more cryptocurrency investments than those who had decreased their exposure.
In stark contrast, there was a rise of 33 percent in the same category in Latin America.
The reason for the little increase in investment coming out of Asia is largely down to the stances a lot of governments in the region have been taking with cryptocurrencies.
The likes of China banning initial coin offerings (ICOs) from taking place in their country are especially noteworthy, but also the nation’s curtailing citizen’s trading activity.
South Korea has also been causing some concern in the markets as a result of rumors related to the potential banning of all crypto trading in the country.
A ban of this nature would be significant because, at a particular stage in 2017, they made up over one-quarter of the entire trading activity for bitcoin.
Popular Forms of Investment
While crypto has become more popular since 2017, it still lags behind property, and traditional stocks regarding the exposure investors have to these assets.
In 2017, 62 percent of the respondents had clients gain further equities exposure, with 56 percent increasing property exposure.
With the cryptocurrency markets being so turbulent in 2018 to date, the ultra-rich may shy away from taking too much risk and instead looking for safer, alternative options than cryptocurrency.
This year, the split between bitcoin bulls and bears seems to be evenly matched, so a lot of investors will probably take a wait-and-see approach before drastically increasing their crypto exposure.
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