A significant number of Asia-based private wealth managers are making their way into the cryptocurrency market, with some predicting that bitcoin (BTC) will reach $100,000 by the end of the year. This information comes from a report by digital asset technology platform Aspen Digital.
The report states that digital assets have become an increasingly popular investment option for private wealth in Asia, with 76% of family offices and high-net-worth individuals already investing in cryptocurrencies and 16% planning to do so in the future. This marks a significant increase from the previous study conducted in 2022, where only 58% had exposure to digital assets.
The main motivations cited by respondents for investing in digital assets include higher returns, diversification, and the appeal of hedging against inflation. The report, which surveyed over 80 family offices and high-net-worth individuals in the second half of the year, revealed that most respondents had assets under management ranging from $10 million to $500 million.
Decentralized finance (DeFi) was highlighted as a key area of interest, with 67% of respondents showing interest in its development. This was followed by 61% interested in artificial intelligence and the decentralized physical infrastructure network (DePin), 50% in blockchain infrastructure, and 47% in real-world assets (RWA) tokenization.
The report also pointed out the growing trend towards institutional-grade digital asset custody among private wealth managers. Despite the positive outlook on the cryptocurrency market, the majority of respondents currently allocate less than 5% of their portfolio to digital assets.
Some of the obstacles highlighted for wider adoption of digital assets include the fragmented nature of the digital asset landscape, regulatory uncertainty, and poor user experience. However, 30% of respondents expressed interest in increasing their exposure to digital assets in the future.
In terms of market outlook, 31% of respondents are optimistic about bitcoin reaching $100,000 by the end of the fourth quarter. Factors such as interest rate cuts, the results of the U.S. presidential election, and positive developments in the crypto industry were cited as bullish drivers.
Overall, the report paints a picture of a growing interest in digital assets among private wealth managers in Asia, with many seeing the potential for significant growth in the market. Despite some challenges, the general sentiment remains positive, with expectations of bitcoin and other cryptocurrencies gaining more mainstream acceptance in the future.