Updated 30 Jul, 2021

Goldman Sachs Says Family Offices Shift to Bitcoin and Cryptos

Key Takeaways:

  • Family offices served by Goldman Sachs increase their demand to invest in bitcoin and cryptos
  • A report by Goldman shows nearly half of over 150 family offices are eager to invest in crypto

Rising Interest by Investment Vehicles to Own Bitcoin and Cryptocurrencies

Institutional investors who manage their own wealth or the personal wealth of others are flocking to increase their bets on digital currencies like bitcoin. The latest Goldman Sachs report showed nearly half of more than 150 family offices that participated in the survey want to add cryptocurrencies to their portfolio.

Goldman Sachs’ report, titled “Widening the Aperture”, found that 15% of respondents are already invested in the cryptocurrency market. Over 45% of the polled have expressed a desire to get involved in the token space.

Citing various reasons, these investment vehicles are viewing the digital asset market as a hedge against “higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”

As cryptocurrency interest is growing, so is the demand from institutional clients of major banks to own a piece of the crypto action. Of the surveyed family offices part of Goldman Sachs’ network, 22% managed assets of $5bn or more. A further 45% oversaw $1bn to $5bn.

The surveyed are family offices that get their exposure to the financial markets from Goldman Sachs as a prime broker and a liquidity provider. This type of investment vehicle has been increasingly fashionable. In fact, it offers a way for the rich to have their wealth managed under fewer regulations than hedge funds. Such family offices include Cascade Investments, managing Bill Gates’ fortune, and Iconiq Capital, overseeing Mark Zuckerberg’s personal wealth.

Family Offices Think the Crypto Wave is Similar to the Internet Revolution

Goldman Partner and Co-Head of Global Private Wealth Management Meena Flynn told Bloomberg family offices are increasingly interested to be given access to blockchain projects and digital currencies. Citing their growing demand for cryptos, Ms. Flynn said the clients considered the crypto ecosystem “as impactful as the internet has been from an efficiency and productivity perspective.”

If Goldman decides to allow family offices access to cryptocurrencies such as bitcoin, it wouldn’t be the bank’s first foray into crypto tokens. Indeed, in mid-May, the investment banking giant launched its cryptocurrency trading desk within the firm’s Global Currencies and Emerging Markets division.