71% of HNIs in digital assets, but only allocate 14% of portfolio to alternative investing

A whopping 71% of high net worth individuals have invested in digital assets, a recent survey by Capgemini, a France-based technology consultancy, revealed.

For the Wealth World Report, Capgemini surveyed more than 2,973 high net worth individuals (HNIs) globally, of which 54% had wealth ranging from $1 million to $30 million, and 46% had wealth of $30 million. dollars and more.

The study considered respondents’ preferences for multiple investment classes, including digital assets, exchange-traded funds (ETFs), non-fungible tokens (NFTs), and metaverse-related items.

The results further revealed that one in seven wealthy individuals who have invested in digital assets are under the age of 40.

Capgemini’s findings follow similar research from Accenture, which found that in the first quarter of 2022, 52% of wealthy Asian investors held some type of digital asset, accounting for 7% of the holdings of investors surveyed.

But Accenture has also discovered that the majority of wealth management firms do not intend to provide exposure to digital assets or related services. These companies have been slow to adapt to the new digital currency landscape and adopt investment products with crypto.

The report further notes that HNI holdings do not consist primarily of cryptocurrency. They typically only allocate 14% of their portfolios to alternative assets, such as private equity, hedge funds, and cryptocurrencies.

“The influx of new investment avenues, such as sustainable investing and digital assets, is having a critical impact on the wealth management industry. Wealth management firms must prioritize timely education on this trend in order to retain their clients,” said Nilesh Vaidya, Head of Wealth Management at Capgemini.

Recently, Crypto Winter hit investors hard. The valuation of the global cryptocurrency market has fallen by around $1 trillion in 2022, and nearly all major coins are now worth half or less of their all-time highs.

Two days after plunging below $25,000, Bitcoin fell to around $20,000. Bitcoin price fell to $20,810.18, down 9%, and Ethereum fell 11.52% to $1,097.99 at 1:28 p.m. Wednesday. The price of Bitcoin (BTC) dipped below $25,000 on Monday from $64,000 in 2021. Ethereum (ETH), the world’s second-largest cryptocurrency, fell more than 8% to $1,311 against $4,735 in September 2021, its lowest since March 2021.

Crypto experts Outlook Money spoke to also said that the equity and crypto markets were in free fall due to fears of lingering inflation. Recent figures from the US Bureau of Labor and Statistics peg inflation at 8.6%, its highest level in four decades. Further interest rate hikes would be needed to bring inflation under control, which would bring more fragility and uncertainty to the markets.