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Rich Increasingly Interested In Cryptocurrencies, But Cautious, Report Finds

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High net worth individuals, or HNWIs, are increasingly interested in cryptocurrencies as an investment and a store of value, but they remain cautious and are seeking wisdom from wealth management firms, results of a report, released Tuesday, showed.

The findings are part of the 22nd annual edition of the Wold Wealth Report, compiled by the professional services firm Capgemini, that defined HNWIs as those having investable assets of US$1 million or more, excluding primary residence, collectibles, consumables and consumer durables.

The report is based on responses from more than 2,600 HNWIs across 19 major wealth markets in North America, Latin America, Europe and Asia-Pacific.

Cryptocurrencies are yet to become a major part of HNWI portfolios, yet investments in these reached an all-time high with total market capitalization peaking in January 2018, the report said.

"However, HNWIs are cautiously interested in holding cryptocurrencies, with 29 percent globally having a high degree of interest, and 26.9 percent saying they are somewhat interested," the report added.

Overall HNWI net worth surpassed the $70 trillion mark for the first time in 2017. Wealth grew 10.6 percent, thus making 2017 the second-fastest year of HNWI growth since 2011.

Investment return was the primary reason to buy or hold cryptocurrencies for 39.3 percent of HNWIs, while 19.3 percent cited their potential as an alternative store of value.

Given their high caution regarding cryptocurrency investment, 71.1 percent of HNWIs aged 40 and below placed high importance on receiving cryptocurrency information from their primary wealth management firms.

"But wealth management firms have been ambivalent when it comes to providing cryptocurrency information to HNWI clients, with only 34.6 percent of HNWIs globally saying they have received cryptocurrency information from their wealth managers," the report noted.

"The 26.9 percent of the HNWIs currently on the fence about cryptocurrencies could be a source of new assets for wealth management firms if they are able to engage in a meaningful dialogue."

by Jyotsna VRTTNews Staff Writer

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