Cryptocurrencies like Bitcoin and Ethereum have been making waves in the investment world over recent years, sparking a new generation of young traders – and with a host of new alt coins making their way onto the market by the day, it seems that these digital currencies, which were once considered just a passing fad, are here to stay.
Nevertheless, the current economic climate has proved testing for the biggest players in crypto, and for popular trading platforms like Quantum AI. Bitcoin and the like are known to be extremely volatile assets, so it’s unsurprising that the ongoing global uncertainty in light of the recent pandemic and the ongoing Russian invasion of Ukraine – not to mention a scandal or two in relation to some of the world’s biggest crypto exchanges – have seen prices swing back and forth rather dramatically this year.
Some of the biggest tumbles have understandably unnerved many amateur traders, who have been quick to sell off their assets – but for others, they have represented a golden opportunity to make some substantial long term gains.
And for the high-net-worth (HNW) investor, this particularly appears to be the case, with confidence amongst some of the biggest money crypto traders standing firm despite the ongoing market pressures.
The first half of 2023 has been rather robust when compared with the ‘crypto winter’ that blighted 2022, and for some, it’s enough to signal that recovery is on the horizon. According to a recent survey conducted by the deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, a telling 85 per cent of HNW clients have considered, or currently already are, investing in cryptocurrencies such as Bitcoin so far this year.
It’s a climb from 2022’s figures, when the organisation found the number for the year to be topping out at 82 per cent. The poll, which is carried out annually, relates to deVere’s HNW clients with between £1m and £5m of investable assets, and who have sought advice on cryptocurrencies throughout the year in question.
Nigel Green, chief executive and founder of deVere Group, said that for the world’s wealthy investors, things are looking promising.
“The half year crypto poll reveals that, despite the crypto market delivering its worst performance since 2018 last year, 2023 has seen a remarkable turnaround for digital currencies.
“This sustained market bounce is quite incredible considering just how dark the 2022 crypto market was, with a string of serious headline-grabbing events triggering a domino effect of financial losses that led to a shattering of investor confidence in cryptocurrencies.
“Last year’s price drops also came as investors reduced their exposure to risk-on assets, including stocks and crypto, due to heightened concerns about inflation and slower economic growth.”
2022 as a year marred by dramatic crypto crashes and market turbulence, in what was widely deemed to be one of the most uncertain years for the space yet. From the TerraUSD and Luna stablecoin tumbles of May that year, which wiped billions of dollars of investor equity out with them, to the bankruptcy of crypto exchange FTX in November, which had similar results, the shockwaves just kept on coming. So, it’s perhaps little wonder that in 2023, the market is faring a little better thus far – although it certainly hasn’t been without its challenges.
“It really was about as bad as it could’ve been for the crypto market last year,” says Green.
“And 2023 has, so far, been characterised by the US Securities and Exchange Commission (SEC) ramping up oversight in the digital asset space.
“The fact, then, Bitcoin has gained 80 per cent already in 2023, putting it on track for its best annual performance since 2020, and that Ethereum prices are also up 52 per cent so far this year, is truly impressive.”
What lies ahead for the crypto market and individual digital currencies like Bitcoin remains unclear, but with wider adoption continuing across the luxury market and ongoing interest in investments from people from all walks of life, it’s looking mildly promising. And for those with plenty of cash to plunge into assets like these, it’s a great time to take advantage of the current prices.
“Against this backdrop of the so-called ‘crypto winter’, and the macroeconomic headwinds, HNWs are consistently seeking advice from their financial advisors about including digital currencies into their portfolios, or increasing their exposure to them,” says Green.
There’s no denying that wealthy individuals are leading the way when it comes to scooping up assets at a lightning fast rate, but institutional investors including Wall Street giants aren’t holding back in doing so, either.
Green says: “If HNWs are continuing to express such huge interest in crypto, as market conditions steadily improve, they’re going to be amongst the first to capitalise on the anticipated continued price rises of the major digital currencies.”
Disclaimer: Nothing in this article should be read or understood to be financial and/or investment advice. Readers should take their own financial advice from a suitably qualified independent financial adviser before making any investment decisions.
