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Family Office grappling with cryptocurrency investment prospects: BNY Mellon
Family offices, known for their entrepreneurial spirit, are embracing new investment opportunities.
Although cryptocurrencies represent 5% of portfolios, an allocation that would have been unthinkable a decade ago, they remain surprisingly divided on the role of the asset class.
According to the recent published According to the 2024 BNY Mellon Wealth Management Study, approximately 39% of family offices surveyed are actively investing in cryptocurrencies or considering them, highlighting a keen interest in this modern asset class.
Various motivations are driving the investment decisions of family offices exploring cryptocurrencies. More than half cite a desire to stay current on emerging investment trends and opportunities.
Additionally, at least 30% attribute their interest in digital assets to the influence of current or next generation leadership within the family office.
However, some professionals remain reluctant to invest in this asset class. Concerns about hacking and cybercrime emerge as the main challenges cited by those who are reluctant to allocate funds to them.
“True to their entrepreneurial nature, family offices are proving ready and willing to seize new and emerging opportunities. Cryptocurrencies represent 5% of portfolios, an allocation that would have been unthinkable ten years ago.”
In January 2024, the Securities and Exchange Commission (SEC) granted approval to the first exchange-traded funds (ETFs) that invest directly in Bitcoin. This regulatory green light paved the way for such assets to become more widely accepted and accessible investment vehicles in major financial markets.
Despite this, an overwhelming 74% also point to an unclear regulatory environment as a barrier to investing in cryptocurrencies, with the percentage rising to 80% among non-US respondents.