A recent survey from KPMG (1) suggests that over 90% of family offices and high-net-worth individuals (HNWI) are either interested in investing in the digital assets field or have already done so. This suggests that Hong Kong and Singapore's rich elite look at digital assets with zeal.
How many are investing in crypto?
Up to 58% of family offices and HNWI respondents to a recent poll are already investing in digital assets, and 34% "intend to do so," according to a research published on October 24 by KPMG China and Aspen Digital titled "Investing in Digital Assets." Thirty family offices and HNWIs in Hong Kong and Singapore participated in the poll, with most respondents managing assets between $10 million and $500 million.
Why are the investments rising ?
According to KPMG, the significant adoption of cryptocurrencies by the ultra-wealthy has boosted industry confidence due to a rise in "mainstream institutional interest." Additionally, it was mentioned that institutions now have easier access to financial instruments involving digital assets, even regulated ones. Assuring adherence to the financial authorities' view that crypto assets are not suitable for retail investors, Singapore's largest bank, DBS, announced in September that it was expanding crypto services on its digital exchange (DDEx) to approximately 100,000 wealth clients who meet the criteria around their income to be classified as accredited investors.
While cryptocurrency exchange Coinhako (2) announced in October that they were one of a select few businesses to be granted a license by the Monetary Authority of Singapore (MAS) to provide services related to digital payment tokens, the majority of investors allocate less than 5% of their portfolio to digital assets, namely Bitcoin ($19,307 BTC), Ether ($1,345), and stablecoins (3). However, the allocations remain very small. According to respondents, market volatility, challenges with correct valuation, and a lack of regulatory certainty on digital assets are barriers to investing in the industry.
Any threats?
The report's authors said that because digital assets are still relatively new, there is considerable hesitation among FOs and HNWIs to engage in the industry, particularly regarding regulation and valuation. However, KMPG pointed out that the two nations' regulatory clarity may improve. For instance, by March 2024, every virtual asset service provider (VASP) in Hong Kong will need to apply for a license. Singapore intends to expand its cryptocurrency restrictions as well.
Hong Kong's securities regulator has declared its desire to relax present regulations for cryptocurrency trading and let small-scale investors make direct investments in virtual assets. The Monetary Authority of Singapore (MAS) has increased access to cryptocurrency trading for authorized investors. Numerous exchanges have received preliminary clearance to offer services related to digital payment tokens in the city-state. Diogo Mónica, co-founder and president of Anchorage Digital, stated earlier this month that Singapore was chosen as a "jump point" into the larger Asian market because of its robust regulatory framework.
