Family Offices Are Interested in Cryptocurrency Assets

The institutional adoption of cryptocurrency assets has increased rapidly since the start of 2021. Leading hedge funds and wealth management companies started investing in Bitcoin and other digital currencies during the first half of 2021.

Goldman Sachs, one of the leading investment banks in the US, recently posted the results of its survey which shows that 15% of family offices have already invested in cryptocurrency assets.

According to a report published by Bloomberg, citing Goldman’s latest survey, 45% of the surveyed family offices are planning to invest in Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. Rich family offices are considering cryptocurrency assets as a hedge against rising inflation, prolonged low rates and uncertain macroeconomic conditions.

"Respondents in the survey also indicated an interest in investing in the digital asset (cryptocurrency) ecosystem. The majority of families want to talk to us about Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term and digital ledger technology. There are many who think that this technology is going to be as impactful as the internet has been from an efficiency and productivity perspective,” Meena Flynn, who helps lead private wealth management for Goldman Sachs, commented on the recent survey results.

In H1 of 2021, large organizations including Tesla, the world’s largest electric car maker, and Meitu, one of the leading Asian technology firms, added Bitcoin, the world’s most valuable cryptocurrency, to their balance sheets.

Cryptocurrency Concerns

In the survey, few respondents highlighted some concerns regarding the long-term value of cryptocurrencies. Despite the latest jump in institutional adoption and growing interest in digital assets, some family offices are still uncertain about investments in the cryptocurrency market.

The overall market cap of digital currencies has lost nearly 50% of its value since May 2021. However, the market cap of cryptocurrencies is still up by more than 80% since the start of this year. Despite the latest dip, Ethereum is up by more than 100% in the last six months. Other digital assets including Binance Coin, XRP, Cardano and Dogecoin posted strong gains in 2021.