The Ultra-Rich Are Turning to Crypto After Driving the SPAC Boom

The Ultra-Rich Are Turning to Crypto After Driving the SPAC Boom

Firms that manage the wealth and personal affairs of rich people are increasingly looking to make bets on crypto.

That’s according to Goldman Sachs Group Inc., which found that nearly half the family offices it does business with want to add digital currencies to their stable of investments.

The bank reported that 15% of respondents in a recent survey — which included responses from more than 150 family offices worldwide — are already invested in cryptocurrencies. Another 45% would be interested in diving into the space as a hedge for “higher inflation, prolonged low rates, and other macroeconomic developments following a year of unprecedented global monetary and fiscal stimulus.”

The interest from family offices shows how these sometimes secretive companies that manage the affairs of the rich are turning into a force across multiple markets. Of the firms that participated in the survey, 22% had assets under management of $5 billion or more, and 45% oversaw $1 billion to $4.9 billion.

Some family offices have long been investors in private equity and real estate, but have recently been one of the biggest drivers of the boom in special purpose acquisition companies, or SPACs. Just like that phenomenon, the past year’s crypto-market frenzy has lured mainstream financial institutions, athletes and celebrities. As family offices grow in size and influence, critics are also pushing for more regulation, especially after the implosion of Bill Hwang’s Archegos Capital Management hit banks with billions of dollars in losses.

Respondents in the survey also indicated interest investing in the “digital asset ecosystem.” The majority of families want to talk to us “about blockchain and digital ledger technology,” said Meena Flynn, who helps lead private wealth management for Goldman. There are many who think that “this technology is going to be as impactful as the internet has been from an efficiency and productivity perspective.”

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