I don't know how much of each they hold and what other coins they're holding - would be a good thing for - some else than me! - to ask them:
\20th Century FoxBitcoin boomers: Australia’s richest families are buying up cryptocurrency (Stockhed)
Australia’s wealthiest families are diversifying their portfolios with crypto as they look to new forms of wealth creation.DigitalX, which helps family offices buy up digital assets, says demand is growing for digital currencies as both a against hedge against inflation as well as a growth asset.‘They’re intensely competitive, they want to win, and they obviously don’t want to be the last one that’s sort of moving towards a new investment,’ executive director Leigh Travers told Business Insider Australia.
Wealthy Australians are increasingly investing their family fortunes in digital assets, as the conservative go unconventional and alternative investmentsbecome mainstream.
In a world of rock bottom interest rates, money has been flooding into riskier assets as investors go looking for yield and cash in on surging prices. It’s no different for the rich and powerful, who are using family offices – privately held companies used to invest their personal wealth – to direct millions of dollars into cryptocurrencies.
Technology investment companyDigitalX (ASX
CC)is seeing the trend firsthand, helping those very offices and trusts transact in a space that is quickly maturing, according to executive director Leigh Travers.
“The biggest change has been around institutional interest which has helped evolve it from a speculative asset to an asset that is part of a diversified portfolio and has the strongest macro winds of any investment possible I think,” Travers told Business Insider Australia.
“As a conservative family office investing for the long term, they don’t want to be associated with something considered as a speculative frenzy.”
While the bull run of today might echo the boom and bust of 2017-2018, it feels very different. The rise of genuine decentralised finance (DeFi) projects is one example Travers gives, although it is notable thatmeme coins and ‘pump and dump’ schemes still prevail today.
With the average family office in Australia and New Zealand controlling more than $600 million each, however, it signals just how ubiquitous the asset class is becoming among investors of all stripes.
The rich haven’t been able to ignore the Bitcoin boom
The sudden appetite has been made clear in sparking the run higher since late last year, helping to attract more outside interest in turn. The value of digital assets held by DigitalX swelled by more than 237% over the first three months of the year, with investors unperturbed by the fact that the assetsremain largely unregulated in Australia.
“A family office might have something like a 3% exposure to gold, and I think that’s the first part of the portfolio that Bitcoins are replacing,” Travers said.
But it would be unfair to categorise Bitcoin as simply a “digital gold”, or a hedge against inflation.
“As markets have become flooded with cash, bonds and stocks have become expensive and investors have gone looking increasingly to alternative investments to find returns. As an alternative investment with liquidity, there’s nothing quite like it.”
Nor is it just Bitcoin. While DigitalX only trades the most established coins, there are plenty of options outside of BTC. Travers reveals that its portfolio also holds coins with very different uses including Ethereum, Binance, Cardano and Polkadot.
“Bitcoin is obviously a store of value which is really attractive in a world of excessive monetary printing. Ethereum is looking to disrupt the Googles and Apples of this world as a decentralised computing network which means you can cut out the rent seeks taking 30% of revenue,” he said.
“Then you’ve got the fastest growing area in the digital asset market which is DeFi, where you’re seeing companies have the same growth in a month as what traditional finance companies might have in four years.”
Instead of trying to pick individual coins, DigitalX says the smart money is backing the infrastructure that underpins cryptocurrency projects.
Even the rich aren’t immune to a fear of missing out, or FOMO, Travers says.
“Family offices want to know what the upside is [and] they want to understand what others are doing in terms of family offices in the market because they’re intensely competitive, they want to win and they obviously don’t want to be the last one that’s sort of moving towards a new investment.”
