December 8, 2022
SINGAPORE – The super rich in some of the world’s wealth management hubs, such as Singapore and Hong Kong, have not been put off by the recent cryptocurrency crash and continue to look to digital assets to diversify their investments, according to a survey out on Wednesday.
More than 70 per cent of the 1,500 people polled said they are moderately or highly interested in digital assets, with almost half saying they think most assets will be digitalised in future.
Just more than half said they invested in crypto in the past year.
The Private Wealth in Digital Assets Study 2022 was carried out by Longitude Research and digital asset ecosystem Matrixport in May and June across Singapore, Hong Kong, Taiwan, Australia and the United Kingdom on investors with a total net worth of US$6.33 billion.
The poll found that in general, the high net worth individuals (HNWIs) are the group that is most interested in investing in digital assets after the crash of stablecoin TerraUSD and sister token Luna in May. The episode led to the South Korean authorities issuing an arrest warrant for Do Kwon, the founder of Terraform Labs, which is behind the collapsed tokens.
Of those polled, 60 per cent are considered mass affluent individuals (MAIs) or those with investible assets worth US$500,000 to under US$5 million; 26 per cent are HNWIs or those who have at least US$5 million of investible assets; and the rest are single and multi-family offices.
The findings are consistent with sentiments in Singapore, where 53 per cent of investors expected to invest at least three-quarters to 100 per cent of their portfolio in digital assets, even after the prolonged downturn in cryptocurrency prices, or crypto winter.
Following the collapse of Terra and Luna, the number of investors highly interested in crypto went up 2.2 times.
Both HNWIs and family offices in Singapore have moderate to high interest in dabbling in digital assets, but Singapore’s MAIs saw the highest rise in interest, compared with other jurisdictions. The poll said the crypto winter sparked a 6.67 times increase in MAIs who were interested in investing in digital assets.
Singapore investors prefer to hold altcoins and other emerging cryptocurrencies when compared with other places. Nearly half of those holding these assets come from Singapore.
Like Hong Kong, Singapore has the largest proportion of investors who own Bitcoin and stablecoins.
Singapore made up one-fifth of the total number of investors polled, like Hong Kong and Australia. Taiwan made up 13 per cent and the UK accounted for the remaining 27 per cent.
In Hong Kong, investors who were very interested in digital assets grew to 34 per cent from 27 per cent, while those who expressed high interest went up to 33 per cent from 29 per cent.
The survey found that sophisticated investors had at least a quarter of their portfolio in digital assets, while experimental investors had up to a quarter of their portfolio in crypto.
One in three investors said they parked money in digital assets without fully understanding what they invested in, while seven in 10 said the Government can play a role in educating investors.
Those surveyed named fraud, cyber security risks, market volatility and the lack of knowledge about the assets as key barriers to investing in the digital asset space.
Mr Eugene Lim, head of private wealth at Matrixport, noted that the gloomy market outlook has not dampened the wealthy’s sentiments about digital assets.
“Understanding the key factors encouraging investors to consider the asset class, and identifying gaps discouraging adoption, was our motive in commissioning the study,” he said. “The report uncovers valuable insights about what’s important in driving acceptance and legitimacy of the asset class, and what it takes for our industry to mature.”