Asian Private Wealth Managers Embrace Crypto, Some Foresee Bitcoin (BTC) Will Hit $100,000 by Year's End

Digital assets have emerged as an alternative investment class for private wealth in Asia, with 76% of family offices and high-net-worth individuals investing in cryptocurrencies

Digital assets have emerged as an alternative investment class for private wealth in Asia, with 76% of family offices and high-net-worth individuals investing in cryptocurrencies versus 58% in 2022.

A growing number of Asia-based private wealth managers are entering the crypto market, with some forecasting bitcoin (BTC) will hit $100,000 by year's end.

The latest findings are based on a survey of more than 80 family offices and high-net-worth individuals conducted in the second half of this year by Aspen Digital, a digital asset technology platform. The full report is set to be released on Monday.

Most respondents had assets under management (AUM) between $10 million and $500 million, with 20% boasting an AUM of $500 or more. The survey also includes contributions from contributions from SBI Digital Markets and Family Office Association of Hong Kong.

Breaking down the findings

Of the respondents, 76% said they are currently invested in cryptocurrencies and 16% are planning to do so in the future. That's a notable improvement from the previous study in 2022, when 58% had exposure to digital assets and 34% planned to invest.

Most respondents cited higher returns as a primary driver, with an increasing number of respondents citing diversification and inflation hedge appeal as key motivations to invest in digital assets, the report shared with CoinDesk said.

Highlighting the interest in new use cases, 67% of respondents expressed interest in decentralized finance (DeFi) development, followed by 61% in artificial intelligence and decentralized physical infrastructure network (DePin), 50% in blockchain infrastructure 47% in real-world assets (RWA) tokenization.

"We believe every asset class will eventually transition onto the blockchain, capitalizing on the competitive advantages that blockchain technologies offer, representing immense growth potential for DeFi. Currently, approximately 85 million users are engaging with financial services on-chain and we anticipate this number will surpass 200 million by the end of 2025," Re7 Capital said.

One respondent pointed to the ease of trading memecoins on Ethereum's rival Solana, while another manager called liquid restaking tokens (LRT) "too complex" to take the exposure.

The survey also highlighted a preference for institutional-grade digital asset custody.

"We continue to observe a strong preference for institutional-grade digital asset custody solutions among private wealth clients, particularly family offices and high-net-worth individuals. This aligns with the increasing demand for secure and regulated digital asset storage options," a statement from Anchorage Digital said.

Crypto market outlook

The private wealth sector also shared their outlook on the crypto market, with 31% of respondents expecting bitcoin to rise to at least $100,000 by the end of the fourth quarter.

"We continue to observe a bullish sentiment among private wealth clients towards bitcoin's price performance in the coming quarters. Several clients have expressed optimism that BTC could rally to six figures by year-end, driven by anticipation of interest rate cuts, favorable crypto industry developments and the U.S. presidential election results," a statement from Elwood Technologies said.

However, the report also highlighted muted allocation to digital assets, with the majority of private wealth managers allocating less than 5% of their portfolio to the asset class.

The report cited the fragmented nature of the digital asset landscape, regulatory uncertainty and poor user experience as critical obstacles for widespread adoption.

"Despite the optimism, the majority of private wealth managers are allocating less than 5% of their portfolio to digital assets, presenting a clear opportunity for further capital deployment into the crypto market," a statement from XBTO said.

That said, 30% of respondents were hopeful of boosting exposure in the future, and several high-net-worth individuals and family offices have already increased exposure from less than 5% to over 10% in 2024 while seeking exposure to the broader crypto market in the wake of the debut of spot-based bitcoin and ether ETFs.