The demand for diversification within family offices’ investment portfolios is influenced by variables such as interest rate fluctuations, rising inflation, and other macroeconomic upheavals. As a direct result, there is a growing interest in digital assets, particularly cryptocurrencies, non-fungible tokens (NFTs), blockchain technology, and advancements within the ecosystem of digital assets.

In a recent survey performed by Goldman-Sachs with a sample size of 150 families from across the globe, 15% of families globally and 25% of families from the Americas were discovered to have already invested in cryptocurrencies.

According to the BNY Mellon 2022 Global Family Office Survey results, a similar picture emerges. According to the poll, three-quarters of 200 family offices deal with cryptocurrencies in some manner, either by investing in them or analyzing them. In addition, over half of those polled were interested in commencing exposure in the near or far future.

There is much more to investing in cryptocurrencies than just buying coins. Individuals considering making the switch have access to various return opportunities and strategies. A recently released article on Sygnum provides an excellent overview of them.

Fund Managers and ETFs: A Simplified Entry into the Market

There are several ways for family offices to participate in cryptocurrencies and leverage existing income models, including crypto loans, staking, and yield farming. However, the most practical method for family offices to enter this market is often via fund managers.

This is because crypto and blockchain investment fund managers provide customized solutions for high-net-worth investors (HNWIs), family offices, and institutional investors. These products expose investors to cryptocurrencies and blockchain technology as asset classes, but investors are responsible for the cost and duty of custody.

Most fund managers provide investors access to various funds with minimum variable investments, fee structures, and liquidation timelines.

Arbitrage, passive or active management of cryptocurrency holdings, venture-style investments in early-stage protocol development, venture funding for businesses operating in the blockchain or cryptocurrency space, and crypto or blockchain-focused investment companies are all viable investment strategies. Investors in these products are expected to do due diligence comparable to traditional funds, which may allow for diversified exposure to digital assets.

ETFs, which serve as fund managers, reduce the hassle of investing directly in digital assets. Even though US regulators have not yet approved exchange-traded funds (ETFs) that invest directly in virtual currencies, several ETFs provide portfolios geared to capitalize on the growth of blockchain technology and cryptocurrencies. In the autumn of 2021, the first Bitcoin-backed exchange-traded fund (ETF) started trading.

There are a few standout fund managers and ETFs when investing in cryptocurrencies and blockchain technology. Include the following:

Fund Managers

Bitwise is a fast-rising corporation that handles $1.3 billion in bitcoin holdings. The firm is well-known for its administration of the largest cryptocurrency index fund in the world (OTCQX: BITW) and its innovative products, which include bitcoin, Ethereum, Defi, and crypto-focused stocks indexes. Bitwise’s mission is to simplify the process of bitcoin investment.

As the investing climate evolves, family office investors want to establish substantial and diversified financial legacies. Grayscale is a digital-native asset manager that manages $40 billion in assets (AUM). The business offers single asset, diversified, and exchange-traded fund solutions that support these objectives.

Multicoin Capital is a five-year-old, thesis-driven investment company specializing in investing in blockchain companies, cryptocurrencies, and tokens. The company manages a hedge fund and a venture fund with total assets under management of $3 billion and invests in both public and private markets. Multicoin is a native cryptocurrency fund that actively participates in network activities, including staking, keeper operations, liquidations, and more.

Pantera has $4 billion in AUM and is a digital asset and blockchain investing veteran. The business was established in 2003. Since launching the first Bitcoin fund in 2013, the organization has been heavily active in digital asset investment. Pantera was the first institutional asset manager in the United States to focus only on the blockchain.

It offers family office customers a full selection of exposure alternatives inside the sector. Their offering may include illiquid venture capital assets, such as early-stage tokens and multi-stage venture capital stocks, and more liquid assets like bitcoin and other cryptocurrencies.

Pecunio is described as “the future of money” and a decentralized investment platform. The organization offers a wide range of investment services that investors may use. This category includes the Pecunio Crypto Currency Fund (PCC), Pecunio Venture Capital managed accounts, and the world’s first fully gold-backed digital asset (PGX).

Our portfolio company Digital Assets Data raised $6 million for its #crypto data platform to deliver institutional-grade info & insights to crypto hedge funds, family offices & asset managers. Congrats to @mikealfred & the team! https://t.co/esuzZYLBm8 @deantak @VentureBeat

— CMT Digital (@CMTDigitalLtd) May 3, 2019

ETF’S

ETFs Amplify offers high-net-worth individuals and family offices seeking growth, income, and risk-managed strategies with additional investment opportunities by providing ETFs with over $4.4 billion in total assets.

Family offices and high-net-worth individuals searching for something a little different may take advantage of Global X’s investment offerings, which include funds devoted to blockchain and bitcoin, disruptive technologies, equity income, difficult-to-access developing markets, and equity income.

ProShares’ exchange-traded funds (ETFs) manage more than sixty billion assets. Investment strategies include interest rate-hedged bonds, dividend growth investing, and geared (leveraged and inverse) exchange-traded fund (ETF) support.

Valkyrie is a supplier of financial services with a strong focus on digital assets. The firm offers wealthy people and family offices the opportunity to invest in a standard actively managed exchange-traded fund to get exposure to the fast-growing digital asset market (ETF). Financial industry veterans head Valkyrie with decades of expertise at organizations such as Guggenheim Partners, UBS, the Chicago Board of Trade, the Chicago Mercantile Exchange, and The World Bank.

VanEck is a global investment manager that offers intelligently planned, future-oriented active and ETF solutions with exposures to expanding industries, asset classes, and markets. These solutions may be found on the website of VanEck.

Their bitcoin exchange-traded note (ETN) product offering includes several digital assets and a cryptocurrency basket, and their approach to traditional approaches differs from that of other organizations.

Also, read – Top 4 Financing Options For Blockchain Projects And Startups

Conclusion

Things keep occurring in 2022 that have never been witnessed before. The Ukraine war is putting bitcoin and other digital assets to the forefront of the public’s attention, fostering fast innovation within the sector. Despite the inherent risks associated with their use, the relevance of cryptocurrencies and other digital assets as alternatives to conventional currencies is growing in these uncertain times. These factors should be included in the investment portfolios of ultra-high-net-worth individuals and family offices seeking to diversify their assets. Fund managers and exchange-traded funds (ETFs) make it easier to enter this market and earn the highest initial return on investment.