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Family Offices Embrace Blockchain and Crypto, Says Grant Thornton

The esteemed consultancy firm Grant Thornton has shared a fascinating insight into the investment trends of family offices. It turns out that many of these offices are displaying a growing interest towards blockchain technologies and cryptocurrencies as investment avenues. Astonishingly, over half of these offices had already invested in digital currencies and blockchain, with 38% having allocated less than 1% of their portfolios to these technologies.

Family Offices are Tapping Into Crypto and Blockchain Opportunities

In response to the increasing significance of cryptocurrencies and blockchain in global finance, family offices appear to be keen to expand their portfolios by investing more into these areas. Recent findings from Grant Thornton, a globally initiative which operates in almost 150 markets and boasts over 68,000 staff, have drawn attention to this growing trend. They report that 35% of family offices are planning to deepen their investments into blockchain, while 27% are hoping to boost their investments in cryptocurrencies.

While these domains seem novel to some investors, they are not untested waters for family offices. Over half of these establishments had already dabbled in cryptocurrency investments. To give a broader perspective, around 38% of these offices had directed less than 1% of their portfolio towards such investments.

Despite the ambiguity surrounding regulatory laws pertaining to cryptocurrencies, Mian Wong, advisory director of Grant Thornton Hong Kong, is of the opinion that digital assets will assume vital roles as alternative investment opportunities. She additionally called upon the governing bodies to ensure a regulated and orderly market for virtual assets. This sentiment is reflected in the draw of family offices to Grant Thornton; it reports interest from such offices across China, Southeast Asia, Europe, and the Middle East.

Last summer, a study by Goldman Sachs brought attention to why family offices are gravitating towards cryptocurrencies. Factors such as continued low rates of inflation, macroeconomic developments, and other fiscal stimulus measures taken in response to the global economic crisis had led them to seek out non-traditional investment opportunities. In fact, 15% of the sampled 150 offices had already invested in blockchain and cryptocurrency products.

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Frequently asked Questions

1. How are family offices embracing blockchain and cryptocurrency?

Family offices are increasingly recognizing the potential of blockchain technology and cryptocurrencies. They are investing in blockchain-based projects, using cryptocurrencies as an alternative asset class, and exploring potential applications of blockchain in their operations.

2. What are the reasons behind family offices’ growing interest in blockchain and crypto?

Family offices are attracted to blockchain and cryptocurrencies due to their potential for diversification, high returns, and as a hedge against inflation. Additionally, the decentralization and transparency offered by blockchain technology align with the values of many family offices.

3. What are some examples of how family offices are investing in blockchain and crypto?

Family offices are investing directly in blockchain startups, participating in initial coin offerings (ICOs), and allocating capital to cryptocurrency funds. Some family offices are also exploring the potential of tokenization, where assets such as real estate or artwork are represented as digital tokens on the blockchain.

4. How are family offices incorporating cryptocurrencies into their investment portfolios?

Family offices are recognizing cryptocurrencies as a new asset class and incorporating them into their investment portfolios alongside traditional assets like stocks and bonds. They may allocate a portion of their portfolio to cryptocurrencies or invest in cryptocurrency-focused funds.

5. What challenges do family offices face when embracing blockchain and crypto?

Family offices may face challenges such as regulatory uncertainty, lack of expertise in blockchain technology, and concerns regarding the security and volatility of cryptocurrencies. However, as the industry matures and regulations develop, these challenges are gradually being addressed.

6. How is blockchain technology being utilized by family offices in their operations?

Family offices are exploring the use of blockchain technology for various purposes, including streamlining administrative processes, enhancing cybersecurity, improving data management, and facilitating efficient transactions. The immutability and transparency of blockchain can provide added security and efficiency to their operations.

7. What does the future hold for family offices and their involvement in blockchain and crypto?

The future looks promising for family offices and their involvement in blockchain and cryptocurrencies. As the technology continues to advance and become more mainstream, family offices are expected to increase their investments in the sector and explore innovative ways to leverage blockchain for various aspects of their operations.