Digital Assets Considered by the Family Offices
As the crypto market starts to defrost with BTC appreciating up 20% in value in only one week, retail and institutional investors alike are raising capital allocations in digital assets.
Much of the investment in digital assets remains to be made by global geopolitical uncertainty and developed monetary stimulus, as investors and economists question the future of the declining United States Dollar. As of March, $3.9 trillion was added to the Federal Reserve's entire asset base, the equivalent of 16 percent of the 2019 U.S. GDP. An extra stimulus bill for Americans is supposed to be announced, further increasing the money supply.
In May, hedge fund pioneer Paul Tudor Jones, co-authored a report to his investors with the ex-deputy head of the International Monetary Fund policy department, Lorenzo Giorgianni, explaining the necessity for diversification in uncorrelated assets to hedge potential expansion. Recommended assets involve Gold, NASDAQ, TIPS, and reputably BTC.
"By the end of the day, the biggest profit-maximizing tactics is to have the fastest horse. Only have the best player and not get wed to an intellectual side that force leaves you weeping the show dust because you believed you were more intelligent than the market. If I am bound to forecast, my risk will be Bitcoin," written by Paul Tudor Jones, Tudor Investment Corporation.
Many retail investors agreed. But what about Family Offices?
Last week I sat with several leading Family Office investors in Europe, including the Middle East, and collected their strategies first-hand. Taking place in Monte Carlo, Monaco, under the High Patronage of Prince Albert II of Monaco, some of the world's diverse esteemed opinion leaders met at Sir Anthony Ritossa's 11th Global Family Office Investment Summit to examine the future of investment possibilities between the difficulty of 2020 and beyond.
"Certain past months have been difficult for all of us, yet they have given time to think on actionable tactics for creating the planet a better spot for all," states Sir Anthony Ritossa.
Traditionally, family offices are risk-averse, concentrating on wealth protection rather than accelerated new wealth creation. BTC and other cryptos remain to be extremely high risk to make it in the usual family portfolio. Still, the millennial age in the families examines the potential, often holding an average investment in digital assets in individual portfolios, while allotting family assets in 'flight to safety' assets like real estate and gold, making a decent profit on investment.
There is an advanced digital asset class on the start; however, which appears to tick both boxes of investing in durable assets and make a higher ROI.
Talking on the digital assets board at the summit, Founder & CEO of Global Digital Assets, Michael Gord explained the benefits of tokenizing real-world assets:
"Family offices previously hold safe assets such as real estate and gold and constantly seem to hold those assets for capital protection. Placing those assets on the blockchain enables them to reduce their custody fees and receive dividends on the assets they previously hold by making those assets transactable."
It persists clear whether those assets will become mainstream in family office groups. However, one point remains clear: as the world remains to experience economic difficulties in 2020 and beyond, family offices remain to explore wealth preservation options.
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