Major financial institutions such as Fidelity and Charles Schwab (NYSE:SCHW) are gradually gearing up towards cryptocurrencies, and as a result are steadily introducing crypto-trading funds (ETFs).
However, high net worth investors (HNWIs) are still interested in investing directly in the asset class, according to the latest statistics from a survey of global wealth managers from globaldata Posted on October 13th.
Sergil WoldeMichel, Senior Wealth Management Analyst at GlobalData commented:
“Cryptocurrency is extremely volatile, so it is not surprising that GlobalData’s 2022 Global Wealth Managers Survey found that the average global HNW portfolio has only 1.4% of cryptocurrencies. While demand is expected to grow in the future, investors also do not want to let cryptocurrency by taking over a large portion of their portfolio.”
There are now nearly 21,000 different cryptocurrencies on the market; Thus, investors have a wide range of assets to choose from. Direct investment has the highest level of risk, compared to that of other securities (and therefore the highest return).
Crypto ETFs provide an extra degree of protection
In light of this, both established and emerging companies now offer customer protection in the form of cryptocurrency funds or ETFs like Bitcoin ETFs. ETFs also provide an additional level of protection for investors, reducing the possibility of their accounts being hacked or their money lost due to forgetting their passwords.
“Players who focus only on crypto ETFs are missing out on a large portion of the high net worth crypto investors who would rather go live. <..> The potential for increased returns is what attracts investors to the asset class; Since it only occupies a small portion of their portfolio, they are happy to take the maximum risk.”
While there are still money managers who are skeptical about bitcoin and its future, consumer demand is imposing the hands of major corporations on this currency. Woldemichael notes that providing a straightforward path to investing in cryptocurrencies and the opportunity to invest through a fund is critical for companies that want to keep as much of their clients’ capital as possible.
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Post-wealthy investors prefer direct crypto investments over crypto ETFs, and the data first appeared on Coinphony.