The surge in the price of bitcoin this year - albeit down from recent highs a few days ago - continues to stoke interest in the digital asset. What do wealth managers understand about this area and how well are they placed to advise clients?
An investment firm specialising in digital assets found that only a minority of the 50 wealth managers it surveyed have a thorough understanding of what is the best way for clients to tap into the space. Entities such as bitcoin have surged in price recently.
Nickel Digital Asset Management - interviewed recently by this news service – polled managers in the US, the UK, Switzerland and Germany during January this year. One in five managers interviewed said they have a good understanding of their clients’ optimal holding structures for bitcoin and have existing relationships with service providers. One in three (32 per cent) said they provide execution-only investment in bitcoin to clients.
Some 18 per cent think that clients have a very positive outlook on bitcoin, which is driving them to make allocations to the cryptocurrency. Some 42 per cent of wealth managers are placing an increasing focus on bitcoin with a view to allowing their investors to allocate to this new asset class.
“There is little doubt that bitcoin is increasingly being accepted as an established asset class. The COVID crisis has intensified this adoption, as investors increasingly look to hedge their portfolio against the tail risks of rising inflation and currency debasement,” Anatoly Crachilov, co-founder and CEO of Nickel Digital AM, said.