Family Offices Grappling with Cryptocurrency Investment Prospects: BNY Mellon

Family offices, known for their entrepreneurial spirit, are embracing new investment opportunities.

Though cryptocurrencies account for 5% of portfolios, an allocation that would have been unthinkable a decade ago, they remain strikingly split over the role of the asset class.

According to the recently published 2024 BNY Mellon Wealth Management Study, approximately 39% of the surveyed family offices are either actively investing in cryptocurrencies or considering them, highlighting a keen interest in this modern asset class.

Various motivations are driving the investment decisions of family offices exploring cryptocurrencies. More than half cite the desire to stay current with emerging investment trends and opportunities.

Additionally, 30% or more attribute their interest in digital assets to the influence of the current leadership or the next generation within the family office.

However, some professionals remain hesitant about investing in the asset class. Hacking and cybercrime concerns emerge as the top challenges cited by those reluctant to allocate funds to them.

“True to their entrepreneurial nature, family offices are showing themselves ready and willing to move into new and emerging opportunities. Cryptocurrencies account for 5% of portfolios, an allocation that would have been unthinkable a decade ago.”

In January 2024, the Securities and Exchange Commission (SEC) granted approval for the first exchange-traded funds (ETFs) that directly invest in Bitcoin. This regulatory green light paved the way for those assets to become more widely accepted and accessible investment vehicles in the mainstream financial markets.

Despite this, an overwhelming 74% also point to an unclear regulatory environment as a barrier to investing in cryptocurrencies, with this figure rising to 80% among non-US respondents.