High-net-worth individuals prefer direct Bitcoin investments over ETF

Bitcoin etf

According to research, high-net-worth individuals prefer direct crypto investments over cryptocurrency ETF s.

Larger financial organizations, like as Fidelity and Charles Schwab (NYSE: SCHW), are increasingly warming up to cryptocurrencies, and as a result, crypto exchange-traded funds are being introduced on a regular basis (ETF s).

According to the latest numbers from GlobalData’s global wealth managers survey, published on October 13, high-net-worth investors (HNW investors) continue to be interested in investing directly into the asset class.

GlobalData Senior Wealth Management Analyst Sergel Woldemichael commented:


“Cryptocurrency is highly volatile, so unsurprisingly, GlobalData’s 2022 Global Wealth Managers Survey found that the average global HNW portfolio holds just 1.4% in crypto. While demand is expected to grow going forward, investors are also unwilling to let cryptocurrency take up a sizable chunk of their portfolio.”


Because there are around 21,000 distinct cryptocurrencies on the market today, investors have a wide range of assets to pick from. Direct investing has the greatest risk, equal to other assets (and thus the most reward).


Crypto ETFs offer an additional layer of security


As a result, both established and emerging enterprises are increasingly providing clients with security in the form of cryptocurrency funds or ETF s such as Bitcoin ETF s. ETF s also offer additional security to investors, making it less likely that their accounts will be hacked or that they would lose money because they forgot their passwords.

Woldemichael continued:


“Players focusing solely on crypto ETF s are missing out on a significant portion of HNW crypto investors who prefer to go direct.” “The potential for higher returns is what draws investors to the asset class; because it only accounts for a small portion of their portfolio, they are willing to take maximum risk.”


Even while some money managers remain wary about bitcoin and its prospects, consumer demand has forced large corporations’ hands. According to Woldemichael, it is critical for businesses that want to preserve as much of their clients’ wealth as possible to give both a direct way into cryptocurrency trading and the opportunity to invest through a fund.