March 5, 2024

Goldman Sachs Report Reveals Shifting Family Office Investment Trends in Digital Assets

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Family offices are increasingly turning their attention to the world of digital assets, with a recent Goldman Sachs report shedding light on the evolving investment landscape. The report, titled “Eyes on the Horizon: Family Office Investment Insights,” unveiled key trends and motivations driving family offices to embrace cryptocurrencies, NFTs, DeFi, and blockchain-focused funds.

According to the report published on May 8, 32% of family offices are currently invested in digital assets. This diverse category encompasses cryptocurrencies like Bitcoin and Ethereum, nonfungible tokens (NFTs), decentralized finance (DeFi) projects, and blockchain-focused funds. The findings are based on a survey conducted between January and February 2023, involving 166 family offices worldwide.

Among the most significant revelations is the motivation behind these investments. Surprisingly, 19% of respondents cited their belief in the transformative potential of blockchain technology as the primary reason for diving into digital assets. In contrast, only 8% and 9% cited speculation and portfolio diversification, respectively, as their main motivators.

The report also highlighted a remarkable shift in the allocation of investments within the digital assets category. In 2021, just 16% of those interested in digital finance held investments in cryptocurrencies. However, this number has surged to 26% in 2023, reflecting growing confidence in cryptocurrencies as a legitimate asset class.

Despite this increase, the report reveals a significant drop in interest in future crypto investments. In 2021, a whopping 45% of respondents expressed interest in potential cryptocurrency investments. This year, that number has plummeted to a mere 12%. As the report notes, “Opinions on cryptocurrencies seem to have crystallized: a greater proportion of family offices are now invested in cryptocurrencies, but the proportion that are not invested and not interested in investing in the future has grown more.”

The survey was conducted globally, with 95 family offices based in the Americas, 34 in Europe and the Middle East, and 37 in the Asia Pacific region participating. This international perspective highlights the widespread interest and adoption of digital assets within the family office sector.

In a related development, Goldman Sachs, which has featured prominently in recent banking crises, appears to be benefiting from changing investment preferences. The report notes that Goldman Sachs’ money funds have seen a substantial influx of capital, with a remarkable $52 billion added, reflecting a 13% growth rate. This surge in investment marks the largest monthly volume of inflows since the onset of the COVID-19 pandemic.

As family offices navigate the evolving landscape of digital assets, the Goldman Sachs report provides valuable insights into their motivations and preferences. While belief in blockchain technology’s potential remains a driving force, shifting sentiments toward cryptocurrencies and declining interest in future investments underscore the maturation of the digital asset market.

Digital Assets Desk

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