A Playground for the Ultra Rich
According to Knight Frank’s most up-to-date Wealth Report, roughly 21 % of the wealth advisers and personal bankers who responded declare their rich shoppers added to their cryptocurrency investments in 2017.
Admittedly, this isn’t a very stunning reality, as final 12 months’s bull run witnessed the full market capitalization of cryptocurrency rise from $17.7 billion on January 1st to a excessive of roughly $615.6 billion on December 30th — and since most of us don’t have billions of dollars mendacity round, it’s secure to imagine a good chunk of that got here from ultra-rich traders.
However, in accordance with Knight Frank’s head of analysis for the Asia Pacific, Nicholas Holt, most of these shoppers don’t even know what cryptocurrency actually is. He instructed CNBC:
In a separate query, we requested about their understanding of blockchain and there’s nonetheless an enormous quantity of bewilderment about blockchain. So, though individuals are getting on the prepare about investing in cryptocurrencies, maybe there’s not a full understanding of what this might imply to their wealth portfolio.
Champagne Wishes and Crypto Dreams
If ultra-rich cryptocurrency traders don’t actually know what blockchain know-how and cryptocurrency even are, it’s probably they’re merely speculating on the largely unregulated market — which can account for the sharp and dramatic sell-off which came about in January and February.
On January seventh, the full market capitalization of cryptocurrency was $827.6 billion. By February sixth, that quantity had plummeted all the best way all the way down to $279 billion. Again, since most of us don’t have billions of dollars out there to take out of the market, it’s similar to imagine a good chunk of that got here from ultra-rich traders.
Furthermore, the tremendous wealthy nonetheless choose conventional shares and bonds over cryptocurrency. At least, that’s what the latest Wealth Report illustrates. Holt defined:
That’s not stunning as a result of the truth that equities did very properly final 12 months. And property nonetheless stays the cornerstone of most rich people’ portfolios, accounting for as much as 50 % in lots of portfolios.
The cryptocurrency market thus, it might appear, is little greater than a playground for the wealthy to attempt their luck at getting richer.
Are you shocked to be taught that ultra-rich traders elevated their cryptocurrency holdings final 12 months, regardless of not figuring out a lot about what blockchain know-how actually is? Let us know within the feedback beneath!
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