Direct Crypto Investments Trump Crypto ETFs for High Net Worth Investors

As the big players embrace the idea of ​​cryptocurrency, or crypto, they typically introduce crypto exchange-traded funds (ETFs). However, wealthy investors remain keen to enter the asset class directly.

The cryptocurrency is highly volatile, with Bitcoin yet to recover from its peak of around GBP 48,000 ($53,868.46) hit in November 2021. Bitcoin is hovering around the GBP 17,000 ($19,076.44) mark. $) in September 2022.

Unsurprisingly, GlobalData 2022 Global Survey of Wealth Managers found that the average global HNW wallet contains only 1.4% crypto. Demand is expected to increase in the future; investors are excited, but they also don’t want to let cryptocurrency take up a large portion of their portfolio.

There are approximately 21,000 cryptocurrencies in circulation according to CoinMarketCap, so investors are not short of options. However, like other securities, direct investing carries the most risk (and therefore the most rewards). As a result, players old and new are offering clients cushion through crypto funds or ETFs, with Charles Schwab being the newest entrant into this space. ETFs also provide an additional layer of security, as investors are less likely to be hacked or lose their assets due to forgotten passwords.

Nonetheless, players who focus solely on crypto ETFs are missing out on a significant portion of HNW crypto investors who prefer to go straight. by GlobalData 2022 Global Survey of Wealth Managers found that the lion’s share of HNW investors across all regions are aware and aware of the risk of investing in crypto, and are happy to go straight as opposed to the safer option via funds. The potential for increased returns is what attracts investors to the asset class; as this is only a small part of their portfolio, they are happy to take as much risk as possible.

Offering customers a wide range of investments and choices is essential for retention. Although some wealth managers still question the cryptocurrency and its longevity, client demand has forced the hand of global players. For those who want to retain as much of their clients’ wealth as possible, offering both a direct path to crypto investing and a funds option is essential.

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