Approximately four percent of the world’s cryptocurrency is held by billionaires. Many of them, according to recent reports, have obtained these funds through discreet family offices.
Family Offices Keep Buying Crypto
The situation is a tough one to evaluate for many reasons. For one thing, it is a bit disconcerting that crypto holdings could be so concentrated when it was designed to give power to general members of the public. There are so many people out there that are still being held down by banks and other financial institutions, and bitcoin was designed to help them escape those chains and bonds.
At the same time, there is a positive note to this story given that crypto ownership is growing and clearly owned by influential figures throughout the globe. According to Campden Wealth, family offices currently have about one percent of their wealth in crypto. It is estimated that there are around 7,300 family offices throughout the globe.
Initially, things started out slow. Many of the executives of these offices were wary when it came to crypto, though they eventually felt compelled to give the space a try. When things started moving up and their wealth began to increase, more investments followed. One CEO of a family office in Connecticut explained in an interview:
We started allocating a small amount to crypto on the venture side, but the funds have done so well, going up seven times over the past year, that it’s become a reasonable part of the portfolio.
Campden Wealth also stated that approximately 28 percent of the family offices that were interviewed for reporting purposes were looking to increase their crypto holdings within the next year.
Anatoly Crachilov – CEO of Nickel Digital – has a long history of dealing with family offices. He and his business associates have noticed a stronger boost in crypto holdings amongst the company’s clients, and he thinks this is only the beginning. He comments:
Initially, we were seeing an allocation of $2 million, $3 million. Tickets are now $5 million to $10 million and we’re seeing some large allocators who are now demanding tens of millions [of dollars-worth] as a minimum starting rate.
Not Everyone’s a Fan
While the popularity of crypto assets is no doubt increasing, several other billionaires are not very fond of crypto, and have told Campden that they are looking to decrease their holdings in the next 12 months. One family office in Ohio explained in a statement:
We don’t view crypto as a currency because it’s way too volatile. How can it be a currency when it fluctuates as much as it does? We’re never going to buy into it.
Others are being influenced by their wealth managers, which have warned their clients – as fear of regulation ensues – to steer clear of the crypto space until the atmosphere calms down.