Crypto: Wealthy Investors Don't Really Like ETFs

Investing in crypto ETFs seems more secure than investing directly in a cryptocurrency. This is because they are less prone to hacking than cryptos themselves. With these assets, it is more difficult to lose your funds due to a forgotten password, as it happens with digital assets. In this context, more and more companies are offering crypto ETFs. This is the case of players such as Fidelity and Charles Schwab, for example. The catch is that wealthy investors seem more interested in direct investing. Find out why.

The result of the recent GlobalData survey

Data analytics and consulting firm GlobalData recently published the conclusions of a investigation. According to these, High Net Worth Investors (HNW) prefer investing directly in crypto rather than investing in crypto ETFs. The senior wealth management analyst at GlobalData reacted to this finding. Sergel Woldemichael actually said: “Players who only focus on crypto ETFs are missing out on the large share of wealthy crypto investors who prefer to go straight“.

Direct crypto investments trump exchange-traded funds when it comes to crypto investors.

Woldemichael added that the majority of global wealthy investors know that investing in cryptos is risky. However, these wealthy investors are happy to opt for direct investment rather than choosing the safer option of crypto ETFs. That’s what GlobalData’s 2022 Global Wealth Managers Survey revealed.

According to Woldemichael:The potential for increased returns is what attracts investors to this asset class; as it represents only a small proportion of their portfolio, they are happy to take maximum risk“.

HNWs invest a small portion of their holdings in digital assets

According to Sergel Woldemichael, given the high volatility of cryptos, it is normal that “GlobalData’s Global Wealth Managers Survey 2022 found that the average global HNW portfolio holds only 1.4% in digital assets”. He added that the demand will increase in the future. However, wealthy investors are not not ready to let cryptos take a significant share of their portfolio.

It must be said that there are approximately 21,000 different digital assets in circulation, according to data from CoinMarketCap. Thus, investors have several options to invest in the sector. Some of them see no reason to leave all the options available to them to invest in ETFs.

According to Woldemichael, crypto players must be able to “offer both a direct path to crypto investing and a funds option“. It would be the only way to succeed inretain as much client assets as possible“.

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