Family Offices Investing in Digital Assets: What’s Driving Them?
A Goldman Sachs survey reveals that family offices worldwide are escalating their investments in digital assets, spanning from cryptocurrencies and stablecoins to shares of associated funds.
What are family offices?
Family offices are privately run organizations that manage the financial activities of wealthy individuals or families. Their primary goal is to provide solutions for all members' needs, including investment strategies, tax payments, philanthropy, and more. However, their primary focus typically lies in safeguarding and enhancing existing wealth through strategic, long-term investments.
These offices employ specialized teams of financial advisors, managers, lawyers, and other key specialists. The offices themselves can vary greatly in size, structure, and the range of services they offer. For instance, some may exclusively serve a single family over numerous years with no limitations, while others cater to multiple families, focusing solely on trading activities.
Why digital assets?
Amid a new era of technological advancement, encompassing artificial intelligence and cryptocurrencies, many family offices have increased their investments in these types of ventures, undeterred by potential risks and global disruptions. Although the percentage of these offices (32% of the total) may seem small, given the traditionally conservative nature of such investors, this is a promising indicator.
Delving into their motivations, 19% of surveyed offices express confidence in the future of blockchain technologies. Other motives such as risk diversification, the use of DeFi, speculation, value preservation, and Web3 garnered roughly equal percentages. In this survey, investors could select up to three responses. Interestingly, the most frequent response was “no specific motivations,” accumulating 68% of responses. This might suggest that either the respondents are hesitant to disclose such information, or they have other motivations for purchasing digital assets, such as funding startups, generating passive income, or participating in governance.
Investment Motivation of Family Offices in Digital Assets. Source: Goldman Sachs Official Report.
What about cryptocurrencies specifically?
Over the past two years, family offices have experienced a significant shift in their stance on cryptocurrencies. Globally, the percentage of these offices engaging in cryptocurrency investments has risen to 26%, while the percentage expressing disinterest has surged to 62%. This remarkable change can largely be attributed to a substantial decrease in undecided participants, which has decreased.
Opinions on cryptocurrencies seem to have crystallized: a greater proportion of family offices are now invested in cryptocurrencies, but the proportion that are not invested and not interested in investing in the future has grown more
cited from the Goldman Sachs Official Report
It becomes more compelling when the data is examined by region. Continental America revealed a marginal increase in both the number of investors and those expressing disinterest. A comparable trend is observed in the EMEA region (Europe, Middle East, Africa), where an all-time high of indifference is recorded at 79%. In contrast, the Asia-Pacific region saw a significant improvement: the percentage of investors has almost quadrupled, reaching 30%.
Percentage of Family Offices Investing in Cryptocurrencies. Source: Goldman Sachs Official Report.
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