Goldman Sachs: 45% of Family Offices Plan to Invest in Crypto

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  • A recent survey by Goldman Sachs reveals that 15% of family offices have already invested in crypto.
  • The survey notes that 45% of family offices are interested in investing in crypto.
  • However, crypto volatility continues to drive some investors away.

Family offices, private wealth management firms that solely serve ultra-high-net-worth investors, are increasingly considering investing in cryptocurrencies, a recent survey by Goldman Sachs reveals.

The survey, which was conducted among 150 family offices that Goldman Sachs works with, noted that 15% of interviewees have already invested in some form of cryptocurrencies. Moreover, an additional 45% have shown interest in dabbling into the crypto world.

The bank asserted that more and more investors turn into crypto to earn higher interest compared to the current next to zero interest rates. Goldman Sachs said family offices generally hanker after crypto to hedge against “higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”

The 22% of the family offices contributing to the survey had more than $5 billion in assets under management. Further, 45% of these firms managed between $1 billion to $4.9 billion worth of assets. A large portion of the survey participants also exhibited passion and enthusiasm for investing in the emerging ecosystem of digital assets.

Global co-head of Goldman Sachs Private Wealth Management, Meena Flynn, stated that a large number of firms consult with us regarding blockchain and distributed ledger technology. She further added that many of these offices feel confident about the future of this technology, and believe it “is going to be as impactful as the internet has been from an efficiency and productivity perspective.”

Nevertheless, a portion of the family offices still isn’t much sure about the viability of the crypto space. The survey noted that some participants, despite the recent boom in adoption, still exhibit concerns regarding the long-term value of crypto assets.

Arguably, these concerns are rooted in the extreme volatility of the crypto industry. For instance, the leading cryptocurrency by market cap, Bitcoin, is down by more than 50% compared to its peak around mid-April. Other altcoins share this same story, with almost all of them having plunged by more than half compared to their recent peaks.

JPMorgan Clients View Bitcoin as “Asset Class”

Apart from family offices, a newly released note from one of the leading financial investment banks, JPMorgan, indicates that its clients view cryptocurrencies as an “asset class.” Mary Callahan Erdoes, CEO at J.P. Morgan Asset & Wealth Management, stated:

A lot of our clients say, ‘That’s an asset class, and I want to invest,’ and our job is to help them put their money where they want to invest.

While cryptocurrencies are not unanimously accepted as an asset class, it is related to investors’ personal opinions. However, it is worth mentioning that JPMorgan is quite bullish on Bitcoin in the long run. Previously, a JPMorgan analyst asserted that Bitcoin could hit $146,000 in the long term.