Eight out of 10 high net worth (HNW) individuals have asked their financial advisers about including cryptocurrencies, such as Bitcoin, into their portfolios over the last 12 months – despite the market experiencing a difficult year in 2022.
According to the results of a study by deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, 82% of clients with between £1m and £5m of investable assets sought advice on cryptocurrencies.
Nigel Green, the CEO and founder of deVere Group, notes: “In 2022, the crypto market delivered its worst performance since 2018, with Bitcoin, the headline-grabbing market leader, falling about 75% during the year.
“The price drops came as investors reduced their exposure to risk-on assets, including stocks and crypto, due to heightened concerns about inflation and slower economic growth.
“Yet against this backdrop of the so-called ‘crypto winter’, HNWs were consistently seeking advice from their financial advisers about including digital currencies into their portfolios.”
He continues: “Interestingly, this typically more conservative group were not deterred by the bear market and adverse market conditions. Instead, they were looking to either start including or increasing their exposure to crypto.
“This suggests that these high-net-worth clients are increasingly aware of the inherent characteristics of cryptocurrencies like Bitcoin, which has the core values of being digital, global, borderless, decentralised and tamper-proof.
“Wealthy investors understand that digital currencies are the future of money, and they don’t want to be left in the past.”
Many of these HNWs who were polled will also have seen a consistent surge in interest being expressed by institutional investors, including Wall Street giants, who bring further capital, influence and confidence to the sector.
In recent months, JPMorgan, like many other major legacy financial institutions, including Fidelity, BlackRock and New York Bank Mellon, have also begun to offer crypto-related services to their clients.
The deVere CEO believes that this momentum of interest is set to build further as the ‘crypto winter’ of 2022 is thawing.
“Bitcoin is on track for its best January since 2013 based on hopes that inflation has peaked, monetary policies become more favourable, and the various crypto-sector crises, including high-profile bankruptcies, are now in the rear-view mirror,” he says.
“The world’s largest cryptocurrency is up over 40% since the turn of the year, and this will not go unnoticed by HNW clients and others who want to build wealth for the future.”
Nigel Green concludes: “If HNWs were expressing such huge interest in the 2022 bear market, as market conditions steadily improve, they’re going to be amongst the first to capitalise in the forthcoming bull run.”