Last Updated on May 9, 2023 by Bitfinsider
The high volatility of the cryptocurrency market over the past year, according to Goldman Sachs’ most recent poll of institutional family office investors, has caused the wealthy elite’s interest in cryptocurrencies to drastically decline.
As of 2021, when the investment banking behemoth first performed its study, 62% of family offices said they had no cryptocurrency investments and had no desire in making any in the future. According to the most recent study, the percentage of people who may be considering investing in cryptocurrencies in the future has decreased from 45% to 12%.
The outcomes show a noticeable change in opinion following recent high-profile crypto collapses, including as FTX, BlockFi, and Celsius. Nevertheless, 26% of family offices are now engaged in cryptocurrencies, up from 16% in 2021, with the most commonly cited justification being their “belief in the power of blockchain technology.”
72% of the 166 family offices surveyed had a net worth of at least $1 billion, and 93% had a net worth of at least $500 million. This year’s poll was carried out in January and February.
In its most recent survey, conducted in 2021, Goldman Sachs discovered that nearly half of the family offices it worked with were considering including cryptocurrency in their investment portfolios due to “higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”
In order to take advantage of higher rate prospects, they are now interested in raising allocations to public and private stocks and adding fixed-income exposure.
According to Meena Flynn, co-head of global private wealth management and co-leader of One Goldman Sachs Family Office Initiative, “Family offices have maintained a largely consistent approach to more aggressive allocations as they seek superior returns. Planned risk-on allocations tell us they see strong opportunities to capture added alpha. This patient, strategic, long-term orientation is often an advantage in managing and preserving generational wealth.”
Despite the fact that there may be a decline in institutional interest in cryptocurrencies, Goldman Sachs has stated that it is open to expanding its 70-person digital assets team and highlighted the potential of blockchain technology to enhance the efficiency of markets like private equity.
Earlier today, Goldman Sachs joined the privacy-enabled interoperable blockchain network known as the Canton Network, run by cryptocurrency infrastructure provider Digital Asset, in order to offer institutional clients a decentralized infrastructure.
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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.