HNW

coinfeeds-bot

tldr; According to a study by deVere Group, 82% of high net-worth individuals asked their financial advisers about integrating bitcoin into their portfolio over the past 12 months. The study found that eight out of every 10 high net worth (HNW) individuals discussed the possibility of adding crypto to their investment portfolios with financial advisers. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*

bojack-horsey

Headline: "Interest in bitcoin surged by 82% in 2022 despite crypto winter" First sentence: "The findings of a new study by deVere Group reveal that 82% of high net-worth (HNW) individuals asked their financial advisers about integrating bitcoin (BTC) into their portfolio over the past 12 months despite the gloomy market conditions." these are... not even remotely the same thing? why is crypto "journalism" so awful?

zcpu2

Meanwhile JPM are buying and encouraging their HNW individuals to do so. They have already been fined for manipulating silver prices - artificially suppressing the price whilst buying. History repeats. Here’s yo receipt.

MikeLitoris5

>“The $100 million will be allocated to high-quality projects, market makers, high-frequency traders, and other institutional clients and HNW individuals.” And what of us, the degenerate gamblers who need more credit? How the world is unfair…

Georgist_Muddlehead

I think also whether they have chosen an amount to hodl, or whether it's a percentage of their assets and they will buy more. If young people with a few thousand dollars own a few hundred dollars of bitcoin, how much are they planning to hold as their wealth grows? I still think the main factor is whether institutions and HNW own significant amounts (instead of gold, presumably).

Raj_UK

No easy way around it re: key management Shamir protocol can help Glacier protocol too if you're HNW or just super paranoid

MoonBasic

Yes he's well connected and yes he donated to politicians, but even that can't save you if you piss off enough people and if you piss off powerful people. Remember it's not just the average person that lost money with FTX - many many hedge funds, companies, and HNW individuals had billions in there. We'll see how this shakes out, but I don't think it'll be a slap on the wrist. Celebs like Kevin O'leary calling for regulation - US could throw the book at him to set an example.

JamesBondMI6007

No, because global banks and institutional investors didn’t lose billions. Also he has supposedly made huge donations to both democrats and republicans campaigns ahead of the mid terms which will only bode well for him. I expect at most he will serve a small amount of time in a very comfortable prison, similar to Martha Stewart. While congress will use this as an opportunity to crack down on crypto through regulations that will seek to “protect retail.” Which by all intensive purposes means locking us out with high net worth requirements to buy crypto. Just like they did with alternative investment products for several decades, which were only available to HNW and institutional investors.

LobotomyJesus

My dude. Companies and HNW individuals regularly borrow against their own company's equity. It's not infinite there and it's not infinite here.

JamesBondMI6007

Yeah I work in fintech, specifically in the alternative investments space. It completely depends on the client and their overall objectives and risk tolerances. I agree most are probably more in the 0.5-5% range but we have seen clients place larger transactions in the 5-10% range. More of your family office or HNW taking larger positions. Institutional players (pensions etc..) taking smaller positions. Still talking hundreds of thousands to millions of dollars flowing into these products per position. It’s also important to note that these alt funds aren’t always direct exposure to BTC or other cryptos in terms of being a spot products. They may generate returns a number of ways that have no direct correlation to the underlying asset price. For instance they may be lending or shorting etc… the current price per share of the alt product isn’t necessarily 1:1 with the value of BTC etc…

JamesBondMI6007

Did you not read any of the articles I linked above. Literally every institutional bank is offering their HNW and institutional clients access to Bitcoin and other cryptos through alternative investment products. I’ve worked in the Fund Manager and Alts tech space servicing banks, broker dealers, fund managers, custodians and transfer agents, for a decade now. I can tell you without a doubt institutional banks are selling BTC/crypto alts products to those clients.

JamesBondMI6007

Early 2021 they were striking deals to bring the products to their shelf. Then they gotta go out into market and sell the product, which is what they’re doing now. They’re going into their institutional and HNW investors and actively soliciting them that they have BTC/crypto exposure available. They’re getting them to put portions of pension funds and family office accounts etc… (5-10% of total portfolios) into these alternative investment crypto funds. There are also the banks like JPM who have started exploring using closed blockchain solutions to speed up settlement on securities transactions and cross borders payments, through use of their JPM Coin.

Warm_Ambition5384

Blackrock owns everything and now has skin in the BTC game with fund for HNW clients. Bitcoin is gonna be fine as Gensler has clearly defined it as a commodity. The rest of the coins are “securities”.

JamesBondMI6007

It’s an alternative investment product. They don’t follow the same regulations as stocks and ETFs because they’re only available to specific types of investors. BlackRock isn’t even close to the first fund manager to offer a BTC based product. FS Investments has had one for over a year or two now, that they sell through Morgan Stanley I believe to HNW clients.

JamesBondMI6007

Let me be clear, they’re offering access to crypto for one reason and one reason only. Because the advisors and clients they sell product to have been asking for access to it in a security vehicle for years now. These advisors HNW clients don’t want direct exposure to crypto they want some product they can buy and bundle together with all the other products in their portfolio models. Something they can easily rebalance in and out of and do bulk purchases as needed using their portfolio management softwares. I used to work in FinTech, specifically for a company who built technology for Fund Managers to sell their products to Broker Dealers and RIAs through our tech. They asked us constantly if we could support BTC based products and if we could help the managers get access or bring these products to market. They don’t care about the tech, they care about charging clients fat fees and getting money in the door.

outofobscure

HNW individuals ARE qualified investors.

EpicHasAIDS

I do know that. I can already buy crypto ETFs. I also know the market. You know, people who actually place investments. There isn't that much demand for crypto. Regardless of retail, HNW, UHNW, etc. There just isn't. I also know this by looking at existing crypto ETFs in other countries. Many developed markets already have these. Guess what? They don't have meaningful assets because we're not there yet. Anyone who thinks there's trillions of dollars of demand for crypto ETFs should be ignored because they know fuck all about the practicality of it. Maybe in 20 years, but to suggest the SEC is scared meaningful assets will flow to a crypto ETF anytime soon is just fucking dumb. Still, 0 people are scared of BTC taking over.

MammathMoobies

Youre completely right, when I said they don't care, I kind of was working under the assumption that acredited investors were the only ones going in. I work with HNW and Institutions, my heads in a bit of a bubble on that front. I'm imagining a world where private funds distribute NFTs, these NFTs were then available in a restricted marketplace. Accredited investors were the only ones allowed to enter these marketplaces and could privately conduct trades. I don't think something like this would drastically impact the price discovery disparity in privates, its not likely to fluctuate daily like a stock, but it will allow for improved liquidity for those that need out early.

MammathMoobies

I'm not going to answer all of these, and I'll admit I'm not an expert on the legal process, this was just a thought I had that I was curious if there were others exploring. You bring up great points of functionality, but think you fail to understand that, if something like this was to emerge, it would drastically change the landscape of how private capital functions. I'm not going to piece through each of your questions but a few thoughts: a) As someone who works in institutional and HNW consulting, managers are desperately trying to get into the HNW cliental with difficulty. Even in the public end of things, mutual funds are blurring their investment universe to incorporate private funds. If this continues, there will need to be a way to make private investments more liquid in these strategies. b) You're questions about valuation, information, etc. Is no different from any other less liquid investments. Even in the depths of global equities, it is difficult and sometimes impossible to gain information to value stocks. NFTs will not create a stock like liquidity market, but it would allow for ownership to be exchanged much more efficiently. Imagine a craiglist that was only for those that could prove to be accredited investors bargaining over the rights to these things. An art auction if you will. c) Regulatory is the fairest point, but the same can be said about all blockchain technology. The government needs to catch up to ensure it is safe and fair. This is going to happen sooner or later.

Etrensce

How is HNW an untapped space for private capital? It's one of the largest tapped spaces. A few obvious questions to ask. How do people value the NFT for each fund or investment (it is not a liquid market)? How do people get information and diligence the fund or investment (there is no requirement for information rights)? How are shareholder rights enshrined via NFTs when the Company's Act does not recognise NFTs as legal ownership? Why would a company not want to lock up investors capital? Why would a company want to lose control of their investor base? NFTs don't solve shit in this space. Platforms that pool smaller accredited investors already exists via venture marketplace platforms. They function perfectly fine without NFTs. The reality is private market investment is a complex process and the admin hassle that NFTs could potentially solve is not anywhere close to the actual difficulty in making private market investments.

MammathMoobies

Youre right that the average joe shouldnt be in private capital, I'm not saying that. I'm saying if there is a process for accredited investors to freely exchange private capital investments. I see a world where NFTs of certain criteria (such as those requiring accredidation) will be limited those who can prove their accreditation before being able to purchase them (possibly through a seperated marketplace) HNW is an untapped space for private capital funds, as they hate the idea of locking up capital.

emage_

- It eliminates the risk of receiving coins that are "tainted" due to no fault of the law abiding citizen. - For law abiding businesses it eliminates the risk of competitors snooping for trade secrets (suppliers, customers, prices paid, etc). - For law abiding employees it eliminates the risk of co-workers snooping for their salary information. - For law abiding HNW/institutional investors it eliminates the risk that "blockchain research" will be used to target them.

Wasp21

If you want the price to go up, you need bigger and bigger money entering the space. The people with big money are the institutional investors, HNW individuals, family offices etc. They will trade crypto along with other assets, which will increase correlation. There's no way around this unless everyone's cool with prices collapsing by 75% or more.

lykewtf

8m in the US alone have Over 1M in liquid assets. There are plenty of HNW people out there to make a huge diff in the price if they decide they want to own it.

Deez1putz

What? Fidelity has 2% cash back for anyone and they’ll do 3% if you’re HNW.

EpicHasAIDS

I'd love for that to happen but we're not quite there yet if only because the compliance and custody issues haven't been completely solved for HNW and HNW+ investors to easily and "safely" reallocate public assets to crypto. We need a portfolio manager to be able to simply sell his stocks and click "buy BTC" without extra fuss and muss. All of that being said, if the "risk off" trade gets deep enough there is simply no chance BTC will be the safe harbour.

joentx

No, know multiple HNW individuals and they don't care about crypto as they are making plenty of money and only invest in what they know and they know nothing about crypto.

networkasssasssin

You don't have to be so rude/abrasive/emotional in your replies. Your points are sentences with words that make sense but they actually don't describe anything beyond surface level. > Banks are businesses, businesses seek to make money. Banks can make money with crypto. Crypto fits with banks. Yes, businesses/banks like to make money but how exactly can banks use crypto to make that money? > Crypto is tied to money and investments. Banks are also in that business. Crypto is a logical extension. Crypto fits with banks. First part is correct but you don't really illustrate how that can reasonable translate into modern banking. This is kind of a repeat of your fist point. > Crypto will require custodial services at institutional and HNW levels. Banks are very good at that. Crypto fits with banks. Translation: "banks work with money and crypto is money so it fits with banks" - still not saying anything new > Blockchain tech can improve banking system. Crypto fits with banks. In what realistic way can Blockchain technology improve banking systems? I'm starting to think you are the one who doesn't know anything about banking.

EpicHasAIDS

If someone works at a fucking bank they should know how crypto fits into the banks. Nothing I said was revolutionary. Let me put is succinctly again, for the sub 100 IQ crew who missed the other post on how crypto can realistically fit into banks. \- Banks are businesses, businesses seek to make money. Banks can make money with crypto. Crypto fits with banks. \- Crypto is tied to money and investments. Banks are also in that business. Crypto is a logical extension. Crypto fits with banks. \- Crypto will require custodial services at institutional and HNW levels. Banks are very good at that. Crypto fits with banks. \- Blockchain tech can improve banking system. Crypto fits with banks. Those are 4 points that any person who works at a bank can put together. You may not like what I said or how I said it, but that's the way it is. If any of those points is hard to grasp, let me know and I'll expand them.

ec265

Percentage gains are percentage gains. On Ethereum, whether you have $100 or $100 million, you get the same percentage return. That’s not true of the legacy system. Larger capital gets you access to different investment opportunities and HNW individuals end up getting better returns. That in itself is huge. Bob who lives in a third world country and who doesn’t have a bank account, can still potentially participate in network consensus and get the same percentage returns as Elon Musk. And DAOs are still very much in their infancy - it’s all a work in progress. The point is though that we are striving for something better.

b4dhabits

Well it depends. My retirement number is quite low, because while I want to be comfortable and be able to travel without worrying about emergencies, I don't need "stuff". 10MM to me is the same as 20MM, doesn't change my daily living (I say that now as someone who has much less than that lmao) But what if I wanted to start a company? Or start a charity? Or have a trust that pays charities? Or have a college fund for relatives? Those are all solid reasons for wanting more than just personal income. It doesn't have to be personal greed, but you should be a good steward of what you have. If you have 20MM, yeah duh throw it in S&P 500 or let an actual HNW RIA manage it for you. But there's nothing wrong with putting 1MM of it in a crypto basket

damjanv1

From a banks perspective I would talk about: 1) the trilema that BTC solves 2) as one poster said addressing FUD 3) Why immutable ledgers are important and how some of the biggest financial innovations have started with boring ledgers 4) the geo political advantages and the billionaire flippening (incoming source of HNW individuals) Basically summarise all of this: [https://balajis.com/why-india-should-buy-bitcoin/](https://balajis.com/why-india-should-buy-bitcoin/) also maybe check out the MIT course on Crypto and cherry pick some slides - the course is run by an ex-banker and financial policy maker and infuses financial language well when talking about the opportunity of crypto [https://ocw.mit.edu/courses/sloan-school-of-management/15-s12-blockchain-and-money-fall-2018/video-lectures/session-1-introduction/](https://ocw.mit.edu/courses/sloan-school-of-management/15-s12-blockchain-and-money-fall-2018/video-lectures/session-1-introduction/) ​ Would also err about talking about BTC solely per se as unless they want to invest in - can't see huge opportunities for a bank, they'll be more interested about the opportunity / threat of smart contracts and generally how blockchains work, how to create a crypto ETF etc.

JamesBondMI6007

You do realize most whales in this market are institutional traders, HNW, and family office investors right? The same people who help keep the banking infrastructure in place. They’re not early adopters, as most early adopters sold out a long long time ago. The likelihood of retail holding beyond a 1,000% increase is insanely low, if they could even hold that long, most of them would’ve cashed at around 250% increase.

JamesBondMI6007

Except this time the central banks will be creating the contraction with interest rate hikes, and won’t have the QE to lean on, like they did for the pandemic event. The markets will contract and they will have no recourse, because they need to offset inflation, only way to do that is to keep raising rates until it comes down. We saw similar events in the 70s/80s when they raised interest rates to 13% to offset an inflation rate of 16-18%. It’s going to be a long cold winter. Crypto might see flows when people look for returns in a down stock market, but historically institutional and HNW money runs from risk assets in bear stock markets to value assets and safer investments.

Godspiral

> BTC/crypto is seen as a volatile, high-risk investment by most and perhaps some HNW, or just the gambler, groups can treat growth stocks in same category as bitcoin. But bitcoin should be compared to government long term/10 year bonds: "If the government is still functional you will get a little interest and your money back in the worst case scenario of holding all 10 years". There is also quick profit potential from swing trading and daily expectations. It's why traditional portfolio balancing strategies that use bonds should shift away from bonds even as those appear more attractive at higher yields.

JamesBondMI6007

I think you’re ignoring a significant factor in why these two markets move in lock step. In that the same institution and HNW individuals that manipulate the stock market also manipulate the crypto market. So when interest rate hikes come, and market corrections happen in both markets it’s because they’re selling to get liquidity to pay debts on margin calls, and to reevaluate where to put the money to maximize gains in a bear market. Once the dust settles from the inevitable stock market crash, or deep correction, that’s why you might see the two decouple. As institutional and HNW investors will turn to alternative investments like crypto, REIT, Hedge, Intervals etc… to get returns in an underperforming stock market and low bond yields. But once the stock market picks up steam and comes out of the bear, they’ll again reevaluate and adjust likely rebalancing out of the riskier assets of crypto and alts and back into index funds.

HMU2018

I would argue that we don’t want to move the market. Retail is viewed as potential dumb money that can be forced out by Wall Street. It’s better if we can accumulate stealthily and let the “smart” money drive up the market caps because they are forced to buy by their HNW customer base.

gaussianDoctor

Wtf you're talking about? He was not dead on at all: 5. Governments started to get involved way before the $25 billion market cap, and it's happening slower than described. Also, we're at the trillions and AFAIK HNW individuals still aren't using BTC for international currency transfers; 6. Very few governments cracked down on crypto so far, so it definitely didn't happen at $400 billion; 7. It's definitely not talked about like it's standardized and common. Businesses haven't learned to follow government rules because those are still being created. And large businesses are very far from using BTC for international transfers (they would use stablecoins if anything, but we're still very far from that as well). It's a somewhat long and well written post, but that's it. Anything beyond that is just wishful thinking.

MyNi_NotYourNi

Absolutely - it is very common for institutions and HNW individuals to park a small % - say 1% - in crypto. Multibagger if it works, no pain if you lose most of it.

NexusMinds

Well it isn't like Powell has targeted crypto specifically, or is reducing the Feds activity purely to get crypto. Insitutions or HNW people that do have some crypto tend to put it first on the chopping block as it is one of the riskiest asset class. Then come over valued and highly indebted stocks, and so on.

alexmcg87

I won’t be surprised when US regulators setup a similar framework just like they did with alternative investments which historically were only accessible to HNW and Institutional investors.

dado3

Plan B wasn't the catalyst. Literally every influencer in the cryptosphere and 90% of the posters and commenters in this sub have been proclaiming that Q4 was going to be HUGE, WE'RE GOING TO THE MOON BOIS!!!!, and all that nonsense. So you're going to single out the guy who has **literally been telling people not to trade with leverage for years** as somehow the problem here? You people in this sub always looking for a scapegoat and someone to blame for basic human greed and stupidity are unable to accept that people make shitty decisions and they're responsible for them. Plan B is not the market, and if you think retail has the power to pump the market to $98K you don't know the first thing about "market realities and dynamics." That kind of new money to the space could only come from HNW individuals and institutions, and they sure as hell aren't following Plan B to figure out whether or not they're going to drop a couple of billion into Bitcoin. This is the kind of stupid I'm talking about. And being aggressive with your ignorance of how the market works and how little influence someone like Plan B actually has should be embarrassing to you. Coming after me for pointing that out is just doubling down.

dado3

Yes, that is actually a pretty common strategy among HNW individuals. You borrow the money to arbitrage the rate spread, but you retain the ability to pay it back at any moment. Your only risk is counterparty risk, so as long as you're doing your DD on where you're investing those stablecoins it's essentially a risk-free trade. It's an assymmetric risk-reward so long as you're investing with a CeFi institution which are all well-collateralized. You can get better rates in DeFi, but that can signficantly raise your risk profile.

alexmcg87

Crashes and highs have almost always been because of whales moving money. Retail investors barely move the markets by comparison to institutional and HNW money. Additionally institutions aren’t magically immune to fear and greed, if anything they’re exponentially more greedy and more fearful than your retail investors for a couple of reasons. For one, they have more money so they can make more money, which feeds their greed. Also they’re more educated about how markets move and are often operating with insider information, so they’re always going to be slightly ahead of retail and will manipulate markets to benefit their greed.