Citi has released the 2024 edition of its Global Family Office Report, offering insight into the role of cryptocurrencies and digital assets in the future of investment and wealth management.
Citi’s recent report on family offices, titled “Global Family Office – 2024 Survey Insights,” reveals a significant shift in the cryptocurrency investment strategy of these key financial market players.
Citi noted that family offices have been reassessing their position in an evolving financial environment, while maintaining a focus on emerging trends in cryptocurrency and digital asset investment. According to the report, These offices have been showing increasing interest in cryptocurrencies, as they seek alternatives to diversify their investment portfolios to protect their assets and adapt to an ever-changing economic environment.
The transformation of family offices towards investment in digital assets
According to Citi’s report, a remarkable 24% of family offices have started investing or are planning to invest in digital assets. This interest in cryptocurrencies and other digital assets comes in a context where economic uncertainty and market fluctuations have led investors to seek new financial alternatives and opportunities.
Traditionally, family offices have been conservative in their investment approach. However, due to the changing economic landscape, they have begun to adopt a more proactive mindset, targeting digital assets as viable options to diversify their portfolios and preserve their value.
Cryptocurrencies, once seen as purely speculative assets and sometimes with no real utility or value, are now are being considered by a growing number of family offices as a legitimate investment asset class. This is due to the growing acceptance that cryptocurrencies such as Bitcoin and Ethereum have gained from financial institutions and their integration into traditional investment platforms, which has contributed to this recognition and change of perspectives. In this context, direct investment in cryptocurrencies is the form of exposure that has generated the most interest among investors today, followed by investment vehicles based on crypto assets, such as exchange-traded funds (ETFs).
However, Citi also highlighted that despite family offices’ growing interest in cryptocurrencies and digital assets year-over-year, 66% of these offices have yet to make firm decisions about allocating digital assets in their portfolios, indicating that education and information about these types of investments remain crucial to increasing adoption.
Family Offices' Perspective on Crypto Asset Risk
Citi's recent report also highlighted that family offices face multiple risks in their quest for profitability through cryptocurrencies and digital assets. First, there are concerns related to the volatility From the market crypto, in addition to the uncertainty in regulation governmental and the ciberseguridadFor the bank, these are the three recurring themes among investors when dealing with digital assets.
According to Citi, while most family offices believe they are managing the risks associated with investing in crypto assets appropriately, managing cyber risks and regulatory uncertainty remains a challenge.
52% of those surveyed identified interest rate developments as their top concern, followed by US-China relations (45%) and market overvaluation (45%). This context suggests that while there is growing interest in cryptocurrencies, family offices need to address their concerns about market stability and regulation before fully committing to this asset class.
The role of family governance in cryptocurrency investment
In addition to the risks involved in investing in cryptoassets, the Citi report also noted that family governance plays a key role in investment decision-making, especially in the context of digital assets.
According to Citi, many family offices lack formalized investment policies, which can make it difficult to implement effective strategies in an investment environment as dynamic as that of cryptoassets. The bank noted that approximately 48% of family offices do not have an investment policy statement, suggesting that there is a significant need to establish a governance structure.
Citi said that as interest in cryptocurrencies grows, it is essential for family offices to establish clear governance frameworks that address not only investment decisions, but also financial education and preparing the next generation to manage this emerging investment asset class.
In terms of security and stability, Citi noted that the formation of investment committees and the implementation of investment policies can help these offices mitigate the risks associated with investing in cryptocurrencies and digital assets and ensure that decisions about these cryptoassets are made in an informed and strategic manner. All this in order to allow them to protect their assets and, in addition, take advantage of the opportunities offered by digital assets in the market.
Citi has concluded that investment in cryptocurrencies and other digital assets is far from a passing trend and that family offices are showing a fundamental shift in their investment mindset, which could define the future landscape of cryptocurrencies.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
