Family Offices and Cryptography: How Real Is That For Old Money?
- Family offices are becoming more involved in cryptocurrency.
- Most wealthy families start investing in cryptocurrency at 1% or 2%, but it often grows to make up a larger percentage of their investment portfolio.
- Family investors rely on mentorship and learning from those who may know the market better and have more experience.
- Experts say the uneven investment opportunities are worth the volatility and risks of cryptocurrencies.
Everyday investors may think that family offices only serve the baby boomer generation who own a great deal of “traditional” wealth and who will never care about the volatile and emerging digital currency. However, the reality is quite different – family offices are becoming more and more involved in the blockchain.
Angelo Robles is the host of the Angelo Robles podcast and CEO of the Family Office Association, dedicated to wealthy families. The founder of Family Office is a passionate investor, active in over 30 different digital assets. He explained that the interest of billionaire families in crypto assets is growing.
“The family office world tends to look old and rickety, but cryptocurrency is gaining popularity and is gaining ground among wealthy families,” Robles said.
Changes from 2017 to 2021
The Family Office Association has been holding events with crypto assets since 2017. There was a lot of interest that year, but when the crypto winter came and the market dropped dramatically, the interest fizzled out for a while. However, the super-rich were mostly held. As Robles explained, they were not afraid or nervous. If anything, they are long-term investors who view cryptocurrency as a buying opportunity. They didn’t seem very smart for two and a quarter years, but then COVID-19 came on and a month or two later it looked like the prices started exploding.
“Some people in my community feel that it was the white paper by hedge fund legend Paul Tudor Jones that specifically sparked interest in bitcoin in the summer of 2020, and then it became a certain level of institutional adoption,” Robles told DailyCoin in an exclusive interview.
Robles explained that a lot of wealthy families investing have been active not only in Bitcoin and Etherium, but also this year, and on platforms like . So they are much more flexible with cryptocurrencies than they are credited with, and what many of them like to talk about in public. What they say in public may be one thing, but what they actually do may be another.
“If I had to give you the percentages of my surveys, I would say that in 2017, 45% of ultra-wealthy investors had some allocation to crypto assets. As of September 2021, that number is likely to be 55%. Admittedly, most of them own Less than 2% of their investable assets, although some hold more than that.
But here is the main point: When I ask families who are not currently dedicated to cryptocurrency if they are interested and are close to possibly pulling the trigger, about 80% of them say yes. They are putting in more effort and they are moving towards some sort of allocation, maybe 25 basis points for bitcoin, but it is getting their feet wet, which makes them feel connected. Robles explained that the trend is only going up.
How do the wealthy invest?
“As new information comes in, I often need to adapt my decision-making very quickly,” Robles said.
“That doesn’t mean I’m a very tactical trader, I pretty much buy and hold. But sometimes I take assets from other resources and I want to make sure my message is strong and that I do it at the level of logic. Also, sometimes I reallocate from my positions within Cryptocurrency. And my experience is – families who invest and they are much older than me – very similar.” Rich families get information but make their own decisions and tactfully manage the risks in their crypto assets because they want to be careful. They understand that we may have a crypto winter and the market may drop a lot. We all understand that. But until that really happens, when the rubber hits the road, we see who the long-term investor is.
on the flip side
- The family office is likely to become more interested in cryptocurrencies in the future.
- Now could be an exciting time to invest in digital assets due to the uneven opportunities.
Why should you care?
Billionaires care about more than just Bitcoin and Ethereum. They have been researching other crypto assets, institutional custody, NFTs, and decentralized financing – the bigger picture of what crypto assets can be and the impact they will have on changing the world, economy and investment landscape.
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