Bitcoin is sharply gaining popularity in Asia. What rate of the first cryptocurrency are big investors waiting for?
Digital assets have become a full-fledged alternative for private equity in Asia, as 76 per cent of the region’s family offices and affluent investors prefer to invest in cryptocurrencies. It is important to note that in 2022, this was only 58 per cent, which means the trend here is unequivocally positive. This is evidenced by a fresh report from Aspen Digital. The company’s analysts also note that wealth managers from Asia increasingly expect BTC to grow to $100,000 by the end of the year.
The accumulation of popular cryptocurrencies is now going at a serious pace. For starters, we note that last week the largest Bitcoin investors or so-called whales additionally purchased 67 thousand BTC.
Changes in the balance of the largest Bitcoin investors
Thanks to this, the total amount of cryptocurrency at their disposal exceeded the mark of 3.9 million coins. CryptoQuant analysts note that this figure does not take into account centralized crypto exchanges and miners, and therefore it reflects the behaviour of investors directly.
Positive is also observed among ether buyers. Over the past month, IntoTheBlock experts recorded only three days, during which the operations of the largest ETH holders ended with a net outflow of funds. Accordingly, on other days they increased the number of coins on their own wallets.
Changes in the balance of the largest Efirium investors
Over the month, the total cryptocurrency of this category of market participants increased by 1.7 million ETH.
Where the cryptocurrency is actively used
The 2022 survey showed that only 58 per cent of managers openly claimed to own digital assets. Meanwhile, only 34 per cent planned to invest in crypto in the near future, CoinDesk reported
For most respondents, high returns were the main reason for investing in cryptocurrencies. At the same time, an increasing number of respondents cite capital diversification and the possibility of hedging inflation, i.e. counteracting it, as the main motives for connecting with digital assets.
Cryptocurrency market growth
The Aspen Digital survey was conducted among more than 80 family offices and high net worth individuals in the second half of this year. The majority of respondents have between $10 million and $500 million under management, with another 20 per cent boasting even larger amounts of capital.
Fund managers have different levels of interest in certain areas of the crypto market. For example, 67 percent of respondents are interested in the development of decentralised finances, while 61 percent are particularly interested in the prospects of artificial intelligence.
Another 50 percent are interested in blockchain infrastructure, while 47 percent are interested in real-world asset tokenisation (RWA).
Popular cryptocurrencies
Here’s a comment from the experts at Re7 Capital on the survey results.
We believe that all asset classes will eventually move to blockchain. By doing so, they will take advantage of the competitive advantages within blockchain technology, which in turn will open up incredible growth opportunities for decentralised finance. At the moment, around 85 million users interact with financial platforms on blockchain. By the end of 2025, we expect this figure to grow above 200 million units.
In the long term, a third of survey participants at 31 per cent are bullish on the digital asset market: they expect Bitcoin to rise to at least $100,000 by the end of the fourth quarter.
As the main factors of growth, respondents named the reduction of the base lending rate in the United States, as well as the results of the presidential elections in the country.
Recall, the reduction of the base interest rate stimulates the activity of the subjects of the economy and forces them to look for new tools to increase income. In September, this indicator was reduced by 50 basis points, which was the first decrease in the last four years.
From the next FOMC meeting market participants expect another reduction of 25 basis points. The event will take place on 7 November.
US Fed Chairman Jerome Powell
However, despite the optimism, most private wealth managers allocate less than 5 per cent of their portfolio to digital assets. The report cites fragmentation, regulatory uncertainty and poor user experience as the main obstacles to widespread adoption of cryptos.
However, 30 per cent of respondents hope to increase the share in the future, and several high net worth individuals and family offices have already increased the share from less than 5 per cent to more than 10 per cent in 2024. Obviously, the launch of Bitcoin and Efirium-based spot ETFs in the US was also a positive reason for this decision.
The popularisation of digital assets is now unlikely to please the residents of Italy. Still, the country's authorities are going to raise the tax on capital gains in crypto to 42 per cent, while the current figure is 26 per cent. This information was confirmed by Vice Minister of Economy Maurizio Leo, who held a press conference regarding the budget for next year.
Previously, cryptocurrency was treated as a foreign currency in Italy. With this in mind, income in it was subject to much lower tax rates. The situation changed in 2023, when capital gains over 2,000 euros began to be charged 26 per cent.
Cryptocurrency market collapse
The rise in popularity of cryptocurrencies is a well-deserved phenomenon. Still, on the scale of the last year, digital assets have become the basis for spot ETFs in the U.S., which have attracted huge investor capital. In the case of exchange-traded funds on Bitcoin, their net inflows exceeded $20 billion at the end of yesterday. Therefore, the interest of large and retail players in what is happening with coins is quite logical.
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