Digital assets have increasingly become a popular alternative investment for private wealth in Asia, with 76% of family offices and high-net-worth individuals now investing in cryptocurrencies, up from 58% in 2022, according to a report by Aspen Digital. The report, released on October 17, 2024, highlights that a growing number of Asia-based private wealth managers expect Bitcoin (BTC) to reach $100,000 by year-end.
The survey, conducted in the second half of this year, gathered insights from over 80 family offices and wealthy individuals, most of whom manage assets between $10 million and $500 million. About 20% of respondents had assets exceeding $500 million. It also noted contributions from SBI Digital Markets and the Family Office Association of Hong Kong.
Key areas of interest for these investors include decentralized finance (DeFi), artificial intelligence (AI), and decentralized physical infrastructure networks (DePin), with 67% showing a particular interest in DeFi development. The shift towards digital assets is driven by factors such as diversification, inflation hedging, and the promise of higher returns. The report also mentions that 16% of respondents plan to invest in cryptocurrencies in the future, signaling a sustained bullish outlook.
Despite optimism, digital asset allocations remain muted, with most managers allocating less than 5% of their portfolios to these assets. Challenges such as regulatory uncertainty, a fragmented digital asset landscape, and poor user experience are cited as barriers to wider adoption. However, 30% of respondents plan to increase their exposure, with several already boosting their investments to over 10% this year, driven by the introduction of spot-based Bitcoin and Ether ETFs.
Market sentiment remains positive, with 31% of respondents predicting Bitcoin could surpass $100,000 by the end of the fourth quarter. Factors supporting this outlook include potential interest rate cuts, the outcome of the U.S. presidential election, and favorable developments within the crypto industry. Meanwhile, there is a growing preference for institutional-grade digital asset custody as more private wealth managers consider expanding their exposure.
