A new survey by banking giant Goldman Sachs found that over a quarter of family offices worldwide have invested in cryptocurrencies. At the same time, nearly a third are interested in the future
Family offices are private wealth management firms that cater to ultra-high-net-worth individuals and families. According to a Goldman Sachs report, more than 10,000 family offices globally manage an estimated $6 trillion in assets.
The report, titled “Eyes on the Horizon: Family Office Investment Insights,” draws from the firm’s first global survey of 166 family office decision-makers across the Americas, Europe, Middle East and Africa (EMEA), and Asia-Pacific (APAC) regions.
The survey revealed that family offices are more aggressive and long-term orientated than other investors in their pursuit of superior returns. In addition, they have a disproportionate exposure to alternative investments like private equity, hedge funds, real estate, and cryptocurrencies.
Crypto adoption varies by region
However, regional variations exist. The proportion of crypto investors is highest in APAC (30%), followed by the Americas (27%) and EMEA (15%). APAC has the highest proportion of crypto enthusiasts, at 41%, followed by EMEA at 27% and the Americas at 12%.
However, such adoption varies by region. The APAC region has the highest proportion of crypto investors (30%), followed by the Americas (27%) and EMEA (15%). The APAC region also has the highest proportion of crypto enthusiasts (41%), followed by EMEA (27%) and the Americas (12%).
The primary motivations for investing in crypto are trusting the power of blockchain technology (19%), diversifying the portfolio (9%), viewing crypto as a store of value (8%), and speculating on future price appreciation (8%).
Crypto challenges remain
The survey also revealed obstacles preventing family offices from investing more in cryptocurrency. Regulatory uncertainty (39%), a lack of transparency and credibility (37%), and a lack of education and understanding (35%) are the top three barriers.
Other challenges include cyber risks (33%), volatility (32%), liquidity (31%), custody and security (29%), environmental impact (28%), and tax implications (25%).
To overcome these challenges, family offices seek more guidance and support from regulators, service providers, and industry experts. Additionally, they want to see increased institutional adoption and infrastructure development in the crypto space.
Crypto-economic opportunities abound
Despite the challenges, crypto provides many opportunities for family offices to diversify their portfolios, hedge against inflation, access new markets, and participate in innovation.
According to Forbes, some family offices invest in crypto directly or through funds, while others launch or join existing crypto ventures.
Some examples of family offices involved in crypto are:
- Winklevoss Capital was founded by Tyler and Cameron Winklevoss, who own Gemini, a crypto exchange and custodian.
- Galaxy Digital Holdings was founded by Michael Novogratz, formerly Partner at Goldman Sachs and a hedge fund manager.
- Barry Silbert, a former venture capitalist and an investment banker, founded Digital Currency Group.
- Ross Stevens founded Stone Ridge Asset Management and also launched NYDIG, a crypto asset manager and custodian.
