Cryptocurrencies Are Conquering Family Funds

People have been heatedly debating cryptocurrencies ever since they first appeared some years ago. After the recent crash, however, the critics saw themselves in the right as they gave the digital currencies no more chances to recover and urgently advised against buying them. But contrary to what many expected, the cryptocurrencies recovered. Bitcoin’s price began to soar again, which is continuing intermittently. The rise in value has brought digital coins back into consciousness around the world.

Cryptocurrencies Are Conquering Family Funds
Cryptocurrencies Are Conquering Family Funds

Now, many institutions, including governments, are considering how to deal with the currencies that have appeared out of nowhere and have so far withstood mostly all attacks. Interestingly, this type of money proves itself to be especially handy in crises. For example, in countries where the official state currency is under pressure, cryptocurrencies have seen a sharp increase in trade. You could last see this in Venezuela, Turkey, or Cuba. Experts are not surprised by this since Bitcoin, for instance, was created precisely for such scenarios.

Moreover, digital currency is forgery-proof and limited in quantity, which makes the coins independent from the manipulation of central banks. The so-called money printing ultimately leads to inflation and a lower value, but that is not possible with digital currencies like Bitcoin. Their course is determined solely by supply and demand.

Large Investors Have Long Been Active in Cryptocurrency Trade

But not only states or private persons are interested in cryptocurrencies, the so-called family offices are also increasingly relying on digital currencies to protect assets. You can fund these companies to manage significant private property and items and their task is often to secure large investments as best as possible and thus avoid losses. Usually, family offices invest in real estate, commodities such as gold and silver, stocks, bonds, foreign currencies, and other valuables, but now digital currencies have also been added to the list.

Current studies show that 45 percent of all family offices want to use cryptocurrencies in the future. They want to protect themselves against low interest rates and higher inflation. However, this mainly affects family offices that manage assets of at least several hundred million dollars. Fifteen percent of them have already invested in digital assets. If you compare the rate with private individuals, you can see a clear difference. Only six percent of private customers have bought cryptocurrencies and added them to their portfolios.

Large Investors Have Long Been Active in Cryptocurrency Trade
Large Investors Have Long Been Active in Cryptocurrency Trade

However, the ceiling for family offices is still a long way off, the media speculate that instead of 45 percent, up to 70 percent of all family offices should invest in cryptocurrencies. Institutional investors are not that far behind either, many of them are already active in the crypto market in Europe. Even the decrease in profits over the past few months has not resulted in investors withdrawing their money. Instead, they have increased their stakes even further. However, the motives of organizations are different. Large investors invest strategically, while private investors are always afraid of missing out or making mistakes.