Family Office Raise Bet On Web3 Space
By Laxmikant Khanvilkar
In an uncertain time for traditional financial markets, investors are seeking refuge in alternative assets, particularly in new-age technology space – the Web 3. Goldman Sachs’ latest survey of institutional family office investors reveals a big swing in crypto sentiment.
The survey found that 26% of family offices had specifically invested in virtual digital assets (VDAs) or more popularly known as Cryptos, while 32% of family offices globally have exposure to digital assets, non-fungible tokens (NFTs), decentralized finance (DeFi), and funds centered on blockchain technology.
The majority of investors (19%) cited a belief in the power of blockchain technology as the reason for their decision to invest in digital assets. Only 8% and 9%, respectively, cited speculation and portfolio diversification as their motivations for investing in digital assets.
In this highly uncertain environment, the Family offices are cooling on crypto.
Family Offices at their very core are about wealth preservation. They are small entities created by wealth owners to both manage and preserve their family wealth for generations still to come and so they hire extraordinary investment teams to make calculated choices of where to invest their money based on precedent, research and risk.
Cryptocurrency as an asset class is extraordinarily volatile. No wonder, the number of family offices not invested or interested in crypto investing has shot up to 62% from 39% in 2021.
And the ones potentially interested in crypto, dropped to 12% from 45% last year.
But it’s not all doom and gloom. More family offices are invested in crypto now than in 2021 — 26%, up from 16%.
Their main reason? A strong belief in the power of blockchain.
Meanwhile, Goldman Sachs is considering expanding their 70-strong digital assets team and see potential in blockchain tech to improve markets like private equity.
They’ve just joined the Canton Network, a privacy-enabled interoperable blockchain network by Digital Asset, to offer a decentralized infrastructure for institutional clients.
Contrary to Goldman Sachs survey, a report by CoinShares suggests that the Digital asset investment funds witnessed a fourth consecutive week of net outflows, with almost $54 million exiting the market in the past seven days ended May 14. However, out of the total $54 million of money outflow, bitcoin-related products accounted for $38 million.
On-going banking crisis in the U.S. has prompted investors to rotate their investments portfolios. The money market funds managed by Goldman Sachs have seen the largest monthly volume of new investments since the Covid-19 pandemic emerged, totaling $52 billion. This is a growth of 13%over the previous month’s inflows.
You need to login in order to Like
