45% of Family Offices Regard Cryptocurrencies as a Hedge – Private Investors Increasingly Purchasing for Fear of Missing Out
Lee Ainslie's Maverick Capital had a difficult third quarter, although many hedge funds did. The quarter ended with the S&P 500's worst month since the beginning of the COVID pandemic. Q3 2021 hedge fund letters, conferences and more Maverick fund returns Maverick USA was down 11.6% for the third quarter, bringing its year-to-date return to Read More
- Almost half of all family offices with hundreds of millions of dollars or more in assets under management regard cryptocurrencies as a hedge against macroeconomic developments
- 53% of US retail investors invest in digital assets for fear of missing out
- 70% of family offices plan to invest in cryptocurrencies for their clients
- 71% of institutional investors in Asia are already invested in crypto assets (Europe 56%, USA 33%)
- One in four financial advisors describes Bitcoin as an attractive asset class due to inflation hedging (2020: 9%)
Cryptocurrencies As A Hedge Against Inflation
45% of family offices with hundreds of millions or billions of dollars under management see cryptocurrencies as a hedge against higher inflation, persistently low interest rates and other macroeconomic developments. This is not the case for private investors: more than half claim to have bought crypto assets due to fear of missing out. This is shown in a new infographic from Block-Builders.net.
Well-funded financial professionals as well as institutional investors are increasingly inclined to buy digital currencies. 15% of the aforementioned family offices have invested already. The rate is significantly lower among private investors. In Germany and the United States of America, 6% of all citizens own cryptocurrencies.
Meanwhile, the crypto quota among so-called smart money - institutions, family offices and accredited investors - seems set to increase significantly in the future. As shown in the infographic, 70% of them are planning to invest in digital assets for their clients.
71% of institutional investors from Asia are already invested in crypto assets. The figure in Europe is 56%, and 33% in the USA.
Investors Increase Their Holdings In Cryptos
As the infographic shows, large investors did not withdraw their profits in light of the recent rises in Bitcoin and numerous altcoins. They have instead increased their holdings significantly.
The narrative of Bitcoin in particular seems to be undergoing a fundamental change these days. From currency in crisis to currency for the crisis: 25% of financial advisors describe Bitcoin as an attractive asset class because of the possible hedge it offers against inflation. Last year, just 9% of advisors shared this view.
The fear of missing out predominates among US private investors. This was the reason given by 32% of those who bought in 2020. This figure has climbed to 53% this year.
"While large investors are primarily investing in cryptocurrencies out of strategic calculation," adds Block-Builders analyst Raphael Lulay, "the fear of missing out prevails among private investors - a fear that is consciously or unconsciously reinforced by social media and crypto-influencers."
Block-Builders.net is a news and information platform that publishes forecasts, investment news and background reports.