• A notable 76% of family offices surveyed during the second half of this year have crypto exposure, according to a report authored by Aspen Digital.

• DeFi, AI, and DePin are key areas of interest.

• Private wealth is long-term bullish on crypto, expecting BTC to trade in five figures by the end of December.

A growing number of Asia-based private wealth managers are entering the crypto market, with some forecasting bitcoin {{BTC}} will hit $100,000 by year's end, according to a report by digital asset technology platform Aspen Digital.

Digital assets have emerged as an alternative investment class for private wealth in Asia, with 76% of family offices and high-net-worth individuals investing in cryptocurrencies and 16% planning to do so in the future.

That's a notable improvement from the previous study in 2022, when 58% had exposure to digital assets and 34% planned to invest.

Most respondents cited higher returns as a primary driver, with an increasing number of respondents citing diversification and inflation hedge appeal as key motivations to invest in digital assets, the report shared with CoinDesk said.

The latest findings are based on a survey of more than 80 family offices and high-net-worth individuals conducted in the second half of this year. Most respondents had assets under management (AUM) between $10 million and $500 million, with 20% boasting an AUM of $500 or more. The report includes contributions from contributions from SBI Digital Markets and Family Office Association of Hong Kong.

Decentralized finance (DeFi) remained a significant area of interest, with 67% of respondents interested in DeFi development, followed by 61% in artificial intelligence and decentralized physical infrastructure network (DePin), 50% in blockchain infrastructure 47% in real-world assets (RWA) tokenization.

"We believe every asset class will eventually transition onto the blockchain, capitalizing on the competitive advantages that blockchain technologies offer, representing immense growth potential for DeFi. Currently, approximately 85 million users are engaging with financial services on-chain and we anticipate this number will surpass 200 million by the end of 2025," Re7 Capital said.

One respondent pointed to the ease of trading memecoins on Ethereum's rival Solana, while another manager called liquid restaking tokens (LRT) "too complex" to take the exposure.

The survey also highlighted a preference for institutional-grade digital asset custody.

Market outlook

The private wealth sector held a long-term bullish outlook, with 31% of respondents expecting bitcoin to rise to at least $100,000 by the end of the fourth quarter.

Respondents mentioned interest rate cuts, the U.S. presidential election results and favorable crypto industry developments as main bullish drivers.

Muted allocation

Despite the optimism, the majority of private wealth managers allocate less than 5% of their portfolio to digital assets.

The report cited the fragmented nature of the digital asset landscape, regulatory uncertainty and poor user experience as critical obstacles for widespread adoption.

That said, 30% of respondents were hopeful of boosting exposure in the future, and several high-net-worth individuals and family offices have already increased exposure from less than 5% to over 10% in 2024 while seeking exposure to the broader crypto market in the wake of the debut of spot-based bitcoin and ether ETFs.