Investors remain cautious on digital assets despite growing interest
A majority or 70 per cent of respondents said digital assets made up less than 5 per cent of their portfolio, says Aspen Digital report
DIGITAL assets are gaining traction in Asia’s private wealth sector with increasing investor interest in decentralised finance (DeFi), artificial intelligence (AI) and decentralised physical infrastructure networks (DePin).
According to a 2024 report by Aspen Digital on Thursday (Oct 17), 76 per cent of respondents were already investing in digital assets. Another 18 per cent said they planned to do so in the future.
This is in contrast to 2022’s survey, where 58 per cent of respondents had allocated investments in digital assets with another 34 per cent indicating they were planning to do so.
While Aspen Digital said the higher proportion in 2024 reflects an increase in digital asset allocation, the digital asset technology platform noted that most private wealth management clients and institutions appeared “cautious” about this emerging asset class.
A majority or 70 per cent of respondents said digital assets made up less than 5 per cent of their portfolio, compared to 60 per cent surveyed in 2022.
Only 16 per cent of the latest survey’s respondents said they had invested over 10 per cent of their portfolio in digital assets (33 per cent in 2022) and another 14 per cent (versus 7 per cent in 2022) had allocated 5 to 10 per cent to this asset class.
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Aspen Digital nonetheless noted that “several” high-net-worth individuals (HNWIs) and family offices which increased their digital asset allocation from less than 5 per cent to over 10 per cent in 2024, had a particular interest in altcoin exposure.
The trend follows the US Securities and Exchange Commission’s recent approval of Bitcoin and Ethereum exchange-traded funds this year.
“Interestingly, very few respondents in our (2024) survey are interested in the store of wealth narrative,” said Aspen Digital, referring to financial assets that are likely to retain or increase in value over time.
While it noted that such assets gained popularity among respondents in 2022 amid volatility caused by the collapse of cryptocurrency exchange FTX and crypto network Luna, the company believes 2024 “represents the early cycle of bull market”.
This comes as private wealth participants appear more interested in “emerging narratives” such as AI, DePin and DeFi.
Some 61 per cent of respondents indicated interest in the AI and DePin sector, while 67 per cent said they were interested in DeFi development.
Aspen Digital however remained cognisant of a “highly fragmented” digital asset landscape, which it believes highlights an increasing demand for asset wealth managers offering a one-stop shop service.
“Respondents from our survey are in general bullish on the future market outlook, citing the interest rate cuts, US presidential election results and robust crypto industry development as key growth drivers,” concluded the company.
Aspen Digital is co-incubated by Hong Kong-headquartered venture builder Everest Ventures Group and British boutique investment bank TT Bond Partners.
Respondents to the 2024 edition of its questionnaire comprised 80 family offices, HNWIs and asset managers based in Asia in H2 of 2024, of which the majority had assets under management ranging from US$10 million to US$500 million.
Over 75 per cent of the respondents were family offices and HNWIs, while asset managers and institutions made up the remainder.
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