Millionaires across the globe are investing in crypto more and more, according to a recent survey from financial advisory firm deVere Group. The study showed that 82% of millionaires with investable assets between £1 million and £5 million (USD $1.23 million and $6.16 million) sought advice on cryptocurrencies over the last 12 months.
This comes despite the bear market in 2022 and suggests that even traditionally conservative high net worth individuals (HNWs) understand the potential of digital currency investments. But what can this deVere Group crypto study tell us about the crypto markets?
— deVere Group (@deveregroup) January 31, 2023
Findings of the deVere Group Crypto Study
The deVere Group crypto study surveyed 560 affluent individuals across Europe, North America, Asia-Pacific, Africa, and South America.
“Bitcoin is on track for its best January since 2013 based on hopes that inflation has peaked, monetary policies become more favourable, and the various crypto-sector crises, including high-profile bankruptcies, are now in the rear-view mirror,” said Nigel Green, founder and CEO of deVere Group. “The world’s largest cryptocurrency is up over 40% since the turn of the year, and this will not go unnoticed by HNW clients and others who want to build wealth for the future.”
The Influence of Institutional Investors
One factor driving this interest in buying Bitcoin and other cryptos is likely the increasing interest expressed by institutional investors. Wall Street giants like JPMorgan and Fidelity are beginning to offer crypto-related services to their clients, indicating that the financial industry is warming up to cryptocurrencies.
Jamie Dimon, CEO of JPMorgan Chase, has been an outspoken critic of crypto. Yet, JP Morgan Chase has created its own JPM coin and executed cross-border transactions on @Polygon.
To me, actions speak louder than words.
— Jake Ryan (@TradecraftJake) January 26, 2023
A PwC analysis from June 2022 also discovered that approximately one-third of the 89 traditional hedge funds asked had already begun investing in digital currencies like Bitcoin.
This involvement of traditional financial institutions in cryptocurrency markets has likely boosted confidence in crypto investments, particularly among HNWs who rely on traditional financial institutions for advice and support.
It may also be the case that many HNWs understand that bear markets are the best time to take positions in risk assets.
“If HNWs were expressing such huge interest in the 2022 bear market, as market conditions steadily improve, they’re going to be amongst the first to capitalise in the forthcoming bull run,” said Green.
As Green pointed out, the the crypto market drop came as investors reduced their exposure to risk assets due to inflation and recession concerns.
“Yet against this backdrop of the so-called ‘crypto winter’, HNWs were consistently seeking advice from their financial advisers about including digital currencies into their portfolios,” he said about the deVere Group crypto study. “Interestingly, this typically more conservative group were not deterred by the bear market and adverse market conditions. Instead, they were looking to either start including or increasing their exposure to crypto. This suggests that these high-net-worth clients are increasingly aware of the inherent characteristics of cryptocurrencies like Bitcoin, which has the core values of being digital, global, borderless, decentralised and tamper-proof.”
13% of Americans (~43 million people) held Crypto in their life according to new research published by JP Morgan.
Another interesting fact by the study: majority of crypto holders made their first purchases during spikes in prices not during the FUD or the bottom!#BTC #Binance pic.twitter.com/Pj77MDitsy
— Dr. Mohamed Al Hemairy ?? د. محمد الحميري (@AlhemairyM) December 20, 2022
Meanwhile, JPMorgan Chase estimated that over 43 million Americans making up 13% of the U.S. population has held crypto at some point, which is up from 3% in 2020. This figure isn’t solely comprised of wealthy investors, but it does demonstrate that crypto investments have become more mainstream in the US.
High Net Worth Individuals Adopting Crypto = Bullish Sign
The survey results from deVere Group crypto study show that even during a bear market, high net worth individuals are still interested in investing in cryptocurrencies. This is likely due to the increasing interest expressed by institutional investors, as well as the thawing of the “crypto winter” in early 2023. The fact that millionaire investors are increasingly considering digital currency investments suggests that crypto adoption could continue to grow over the coming years.
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