Wealthy investors in Asia are neither shy nor ignorant when it comes to cryptocurrencies, as research reveals that 52% of them owned some kind of digital asset during the first quarter of 2022.
According to an Accenture study published June 6, digital assets, which include cryptocurrencies, stablecoins, and cryptocurrency funds, made up an average of 7% of surveyed investors’ portfolios, making them the fifth most important asset class for investors in Asia.
It was more than they allocated to foreign currencies, commodities and collectibles, and in some cases matched or exceeded the amount invested in private/venture capital and hedge funds.
Accenture said that the survey was conducted with more than 3,200 customers in China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore and Thailand. The company defines a wealthy investor as anyone who manages investable assets between $100,000 and $1 million.
Investors from Thailand and Indonesia had the highest percentage of digital assets in their portfolios compared to their peers.
Although half of investors in Asia already held digital assets in the first quarter of 2022, Accenture research indicates that another 21% are expected to invest in them by the end of 2022, meaning that up to 73% of wealthy Asian investors could own a digital asset by the end of the year.
“Digital assets represent a rare and clear white space in the industry with a significant business opportunity.”
Wealth managers hold back
Nevertheless, the firm found that wealth management firms — those that offer financial, tax, investment advice, and estate planning to their clients — have been slow to jump on the crypto bandwagon. 67% of wealth management companies stated that they have no plans to offer digital asset products or services.
“For wealth management firms, digital assets are a $54 billion revenue opportunity that most are ignoring.”
Wealth management firms cited a lack of belief in and understanding of digital assets, a wait-and-see mentality, and the operational complexity of launching a digital asset offering as their main reasons for holding back.leading them to prioritize other initiatives instead.
Accenture said that the lack of commitment on the part of companies means that investors have been forced to get their cryptocurrency financial advice from unreliable sources.
“This lack of engagement by firms means that many clients are seeking advice on digital assets in unregulated forums, including peer-to-peer advice on social media.”
Nevertheless, Accenture has underscored the importance of wealth management firms driving the digital asset space, or risk being left behind.
“Although many firms are hesitant to enter the digital asset space, and for a number of reasons, their competitors have shown that success is possible.”
Asian investors have turned to cryptocurrencies, especially in the last year.
In April, a report from cryptocurrency exchange Gemini revealed that Cryptocurrency adoption skyrocketed in 2021, especially in countries like India and Hong Kong. Around 45% of respondents in Asia-Pacific purchased their first cryptocurrency in 2021.
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