Family Offices Grappling with Cryptocurrency Investment Prospects: BNY Mellon

Family offices, known for their entrepreneurial spirit, are taking advantage of new investment opportunities.

Although cryptocurrencies make up 5% of portfolios, an allocation that would have been unthinkable a decade ago, they remain surprisingly divided over the role of the asset class.

According to the recent published According to the 2024 BNY Mellon Wealth Management Study, approximately 39% of family offices surveyed are actively investing in or considering cryptocurrencies, highlighting a strong interest in this modern asset class.

Several motivations are driving the investment decisions of family offices exploring cryptocurrencies. More than half cite a desire to stay up to date with emerging investment trends and opportunities.

Additionally, 30% or more attribute their interest in digital assets to the influence of current or next generation leadership within the family office.

However, some professionals are still hesitant to invest in this asset class. Concerns about hacking and cybercrime emerge as the main challenges cited by those reluctant to allocate funds to them.

“True to their entrepreneurial nature, family offices are ready and willing to take advantage of new and emerging opportunities. “Cryptocurrencies represent 5% of portfolios, an allocation that would have been unthinkable a decade ago.”

In January 2024, the Securities and Exchange Commission (SEC) granted approval to the first exchange-traded funds (ETFs) that invest directly in Bitcoin. This regulatory green light paved the way for these assets to become more accepted and accessible investment vehicles in the main financial markets.

Despite this, an overwhelming 74% also point to an unclear regulatory environment as a barrier to investing in cryptocurrencies, and this figure rises to 80% among non-US respondents.