More family offices are investing in crypto as millennial heirs take a seat at the table and banks hop on the Bitcoin bandwagon

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Steve Sokić has spent nearly three decades in wealth management. Earlier in his career when he met with affluent families, he would meet only with the patriarch, sometimes the matriarch as well.

But now he sees heirs in their 20s and 30s sitting at the table, and some of these tech-savvy millennials suggest cryptocurrency as a way to diversify the family fortune.

“Younger family members are getting involved in wealth stewardship much earlier,” Sokić, the head of private wealth at the $500 billion investor-services firm IQ-EQ, said. “And generally, younger people are looking at different asset classes that aren’t brick-and-mortar.”

Family offices are typically more conservative than institutional investors when it comes to portfolio strategy, but riskier assets have become more attractive with interest rates near historic lows. Between young heirs introducing their parents to digital assets and banking giants like Goldman Sachs and Morgan Stanley jumping on the Bitcoin bandwagon, more family offices are getting comfortable with cryptocurrency.

Millennials and Gen Z are leading the charge when it comes to purchasing crypto. In a survey of 2,000 US adults from Blockchain Capital, 46% and 55% of millennial and Gen Z respondents, respectively, said they planned to buying bitcoin in the next five years. (Only 8% of respondents who were 65 and up answered the same.) The average crypto owner is 38 years old, according to another survey by Gemini, a cryptocurrency exchange.

“It’s top of mind of every family office we are talking to,” Pat LaVecchia, the CEO of the digital-securities broker-dealer Oasis Pro Markets, said.

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‘They thought crypto was a scam. Now they wish they had made that investment.’

Kent Swig, a third-generation heir of the $3 billion real-estate dynasty, made a splash in April when he secured $6 billion in gold to back his new digital token. Swig was introduced to cryptocurrency investing by his now 26-year-old son, Oliver, before launching Dignity Gold.

Most families with generational wealth are betting far less on crypto than Swig, LaVecchia said, and they are usually investing in Bitcoin or Ethereum.

“Is it a 50% allocation? No. Is it a 5% allocation? Maybe,” he said.

Paul Karger, a managing partner of the financial planner TwinFocus, tells his clients, a mix of professional money managers, former executives, and wealthy families, to hold at least a 1 to 2% position in digital assets, he said. He added that the attitude toward cryptocurrency had dramatically changed in the past year and a half, in large part because of the ease of trading. Clients can set up a Coinbase account and connect it to their bank account in minutes to dabble in trading. Many families get started in cryptocurrency by investing on a personal level before they bring it to their office. 

LaVecchia knows families that missed out on opportunities to capitalize on crypto and don’t want to miss the boat again, he said. One family office told him recently that they had declined to invest in Coinbase 5 1/2 years ago when it was valued at only $415 …read more

Source:: Businessinsider – Finance


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