Enduring popularity
Avaloq’s 2023 investor survey found that 92% of respondents would consider investing in crypto if their traditional financial provider offered crypto services. This pointed to potential demand within existing client bases and an opportunity for wealth managers to broaden their investment offering and meet evolving client expectations.
Despite market volatility, cryptocurrencies remained popular among investors surveyed by Avaloq in 2023. Of the 3,000 affluent to ultra-high net worth investors surveyed in Europe and Asia, 37% held cryptocurrencies. In the UK, ownership grew from 22% in 2022 to 29% in 2023. This was broadly in line with Germany, where the number of investors holding crypto was up from 34% in 2022 to 40% in 2023. Switzerland (57%) and Hong Kong (50%) also registered minor increases.
Singapore deviated from this trend, dropping significantly from 48% in 2022 to 29% in 2023, potentially influenced by negative newsflow and a subsequent government crackdown. Japan maintained stable ownership at 15%. However, 41% of Japanese investors who did not yet hold crypto stated that they were not interested in the asset class, in stark contrast to the global average of 24%.
The demographics of crypto ownership
When broken down by wealth bands, crypto ownership was highest among those with investable assets of USD 10 million to USD 50 million (57%), followed by those in the USD 1 million to USD 10 million bracket (43%) and those with USD 50 million or more (38%). Among affluent investors with USD 250,000 to USD 1 million in investable assets, 28% held crypto.
The survey also highlighted a generational divide in cryptocurrency adoption, with the asset class being more popular among younger investors. 47% of Millennials and 36% of Gen Z investors held crypto, followed by Gen X at 34%. In contrast, only 16% of Baby Boomers were investing in crypto.
Avaloq’s 2023 data showed that out of the 63% of investors who did not already own cryptocurrencies, the reasons for not doing so primarily revolved around market volatility (43%), a lack of trust in crypto exchanges (30%) and not knowing where to start (27%).
Wealth managers’ strategic role
Wealth managers have a significant opportunity to address these concerns. They can offer trusted advice and reassurance for those who are looking to venture into the world of crypto assets but who lack the knowledge and confidence in crypto exchanges, which dominate the market. In the 2023 survey, 38% of investors held crypto assets via a wealth manager, while 77% used crypto exchanges.
Avaloq’s 2023 research highlighted the potential for wealth managers to provide investors with an alternative to specialist crypto platforms, combining access to digital assets with the expertise and established relationships of traditional providers.
For wealth managers considering crypto services, technology is an important part of the equation. Digital assets need to be integrated into existing portfolios and client experiences if they are to form part of the broader wealth management relationship.
