Institutional interest propels cryptocurrencies into mainstream for wealthy investors looking to diversify portfolios.
High net worth Australians are committing increasing sums in cryptocurrencies as digital assets move from the fringes of investment markets and become steadily more mainstream.
Leigh Travers, executive director of technology investment firm DigitalX, says he has observed a growing trend toward crypto investing as family offices plow millions of dollars into the sector.
He told Business Insider Australia, “The biggest change has been around institutional interest, which has helped evolve [cryptos] from a speculative asset to an asset that is part of a diversified portfolio and has the strongest macro winds of any investment possible, I think.
“As a conservative family office investing for the long term, they don’t want to be associated with something considered as a speculative frenzy,” he added.
Although the current bull run on digital currencies may rekindle memories of the 2017-18 boom and bust, Travis noted a difference. He said the growth of decentralized finance projects was one distinctive feature, and warned investors to exercise caution when it came to “pump and dump” schemes and meme coins.
Travis said the value of DigitalX’s portfolio of digital assets had soared 237% during the first three months of the year, with investors unfazed by the fact that cryptocurrencies remained mostly unregulated in Australia.
“Bitcoin is obviously a store of value, which is really attractive in a world of excessive monetary printing,” he said. “Ethereum is looking to disrupt the Googles and Apples of this world as a decentralized computing network, which means you can cut out the rent [seekers] taking 30% of revenue.
“Then you’ve got the fastest-growing area in the digital asset market, which is DeFi, where you’re seeing companies have the same growth in a month as what traditional finance companies might have in four years.”