Growing Crypto Interest Offers ‘Enormous Potential’ For Wealth Managers

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Nearly 90% of the UK’s investors would buy crypto assets if they could so through a traditional financial provider, a major new study has revealed.

The findings from software provider Avaloq also showed that 29% of high-net-worth individuals already hold cryptocurrencies in their portfolio, marking a 7% increase since 2022.

Avaloq survey of some 3,000 investors revealed that the main barriers to adding cryptoassets to a portfolio were:

• Concerns about volatility – 35%
• A lack of trust in crypto exchanges – 31%
• A lack of knowledge about where to buy crypto – 28%

Currently some 77% of people already invested in crypto buy their coins through a centralised exchange, with 38% of these saying their purchases are facilitated through a wealth manager.

Dr Nils Bulling, Avaloq head of digital assets product domain, said: “Our research reveals an enormous opportunity for wealth managers to enter a market where the expertise and brand heritage of traditional players will offer reassurance to investors.

“In a rapidly evolving landscape, it is vital that wealth managers can adapt to clients’ requirements, including demand for crypto assets.”

The findings come as a recent report from the European Securities and Markets Authority (ESMA) stated that decentralised finance (DeFi) and cryptocurrency markets in general do not currently pose a significant risk to financial stability.

However, the report did note that presently the crypto market accounts for just 3.2% of total assets held in EU banks but if this were to grow there could be the potential for systemic risks.