A recent report by UBS highlights a growing trend among Chinese family offices to increase investments in cryptocurrencies, driven by generational changes and institutional acceptance.
Increase in Crypto Allocations
According to UBS, overseas Chinese family offices are allocating approximately 5% of their investment portfolios to cryptocurrencies. This marks a growing trend of acceptance of digital assets and a shift from traditional investment methods.
Lu Zijie, an executive at UBS, stated, 'In China, some family offices are willing to allocate up to 5 percent of their portfolios to crypto, reflecting a generational shift and broader institutional acceptance.'
Rising Trading Volumes in Asian Markets
The increase in crypto allocations by family offices leads to higher trading volumes in Asian markets. For example, Hong Kong's HashKey Exchange reported an 85% rise in registered users. UBS estimates that over $100 million has been allocated to crypto by Asian family offices in recent months, driven by regulatory clarity and diversification motives.
Strategic Asset Diversification
Bitcoin and Ethereum are primary targets for allocations due to their low correlation with traditional assets. This strategic shift is seen as an important tool for diversification amid evolving financial landscapes. Regulatory clarity, such as the Hong Kong Stablecoin Framework, boosts investor confidence and encourages direct engagement with crypto markets.
With evolving regulatory and market conditions, further growth in crypto allocations is anticipated among family offices. This could lead to increased liquidity in crypto markets and broader acceptance of digital assets as legitimate investments.
