A new report has revealed that the world’s big players are spending more money than ever on crypto, which has become “an essential part” of the investment portfolios of the wealthy.
The request was made in a wealth management study of Capgemini, an IT consulting and services company based in Paris, France. The company said the number of high net worth individuals (HNWIs) increased by 7.8% in 2021, with 1.7 million people worldwide joining the category.
“Wealth,” the firm added, “grew 8%” to $6.4 trillion last year.
As part of its research, Capgemini explained that it spoke to “2,973 HNWIs across 24 major wealth markets in North America, Latin America, Europe and Asia-Pacific” about their behavior of investment and their level of “preference for emerging asset classes such as digital assets.
The company concluded that ‘digital asset investments’ were ‘becoming an essential part of HNWI portfolios’ – and noted that 71% of respondents said they had already purchased ‘digital assets’.
For HNWIs under the age of 40, however, the number was 91%.
“Furthermore,” the report authors added, young HNWIs said “cryptocurrencies are their preferred investment in digital assets.”
The same group said exchange-traded funds (ETFs) and metaverse-linked investments were also attractive.
The French company noted that the popularity of assets related to crypto and blockchain technology would likely attract the attention of wealth management firms, explaining:
“As the adoption of digital assets (cryptocurrencies, ETFs, NFTs, metaverse-linked products and digital currencies) grows, [wealth management] companies will need capabilities around products and education. Additionally, ecosystem partnerships will be needed to create a diverse portfolio of digital offerings.
The report’s authors also added that the rise of “digital asset classes” has “increased the demand for educational capabilities” for HNWIs to “learn and make more informed decisions.”
The authors quoted Joseph Gribb, the director and head of IT support at the American investment adviser Avant-gardeas stating:
“As demand for emerging asset classes grows, companies need to offer investment advice based on clients’ risk tolerance and deliver distinctive experiences across different channels based on client preferences.”
Capgemini explained that 30% of the HNWIs he spoke to had amassed their wealth in the IT sector and belonged to what they called the “tech-wealth” demographic.
– 13% of Canadians surveyed owned Bitcoin in 2021, up from 5% in 2020 – Bank of Canada
– Roughly 50% of Crypto Owners Surveyed Made Their First Purchase in 2021 – Gemini
– Accenture sees strong demand for digital assets among Asian investors, but hesitation among consultancies
– Only 18% of respondents do not expect Bitcoin to become legal in 3 years – Poll
– 40% of low-income respondents want to use Bitcoin – not to make money
– 7 in 10 retail and institutional investors plan to buy more crypto, according to Bitstamp survey