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Asian Family Offices Never Gave Up on Cryptocurrencies 

  • According to a survey of 30 family offices and wealthy investors in Hong Kong and Singapore, published by KPMG China and Aspen Digital, 92% of respondents were interested in digital assets, with 58% already invested and 34% planning to do so.
  • Family offices may also see digital assets as diversification and a separate asset class, and also an appealing hedge against wider market ructions.

 

Despite months of market turmoil with Bitcoin down about 70% from its peak and Ether down about 60% year to date, Asian family offices are still buying into cryptocurrencies as weak returns from their traditional portfolios make digital assets attractive.

Many Asian family offices sat on the sidelines as cryptocurrencies soared last year and have been waiting for buying opportunities this year as a wave of monetary policy tightening has hammered risk assets.

According to a survey of 30 family offices and wealthy investors in Hong Kong and Singapore, published by KPMG China and Aspen Digital, 92% of respondents were interested in digital assets, with 58% already invested and 34% planning to do so.

More than 60% of the respondents were family offices or individuals managing assets worth between US$10 million and US$500 million.

This year’s decline in digital asset prices had to be set against the poor performance of many Asian equity and real estate markets, making cryptocurrencies somewhat appealing, especially as they are often measured against the dollar which has pummeled Asian currencies.

Family offices may also see digital assets as diversification and a separate asset class, and also an appealing hedge against wider market ructions.

At the Raffles Family Office forum held in Singapore recently, the multi-family office unveiled REVO, a family office dedicated to digital assets and helping wealthy families access them with institutional protections.

Hong Kong’s traditional asset classes have suffered this year with the Hang Seng down more than 30% hammered by geopolitical tensions and repeated Covid-19 lockdowns in mainland China, the city’s equities are underperforming U.S. and European stocks.

Against this backdrop, many family offices have shifted into cryptocurrencies and private equity in an effort to find shelter from the storm.

The focus on family offices comes as cryptocurrency companies in Hong Kong are actively lobbying regulators on licensing requirements that will come into effect in March, but given China’s overarching influence over the territory, it remains to be seen what will become of the push.

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