Bitcoin breaking a record by exceeding the $111,000 level yesterday had a great impact on the cryptocurrency market.
While this rise was supported by increasing optimism about regulations in the US, it was also a matter of curiosity how high-income investors positioned this asset in their portfolios.
According to Michael Sonnenfeldt, founder and chairman of TIGER 21, ultra-rich investors are considering cryptocurrencies, especially Bitcoin, as a long-term store of value, with some even preferring it to gold. “For some of our members, Bitcoin is neck and neck with gold. It stands out as a store of value like gold, but it is more attractive because it is digital,” Sonnenfeldt said.
TIGER 21’s 1,600 members manage a combined total of nearly $200 billion in wealth. Members’ portfolio allocations average 28% private equity, 28% real estate, and 24% public stocks. Cryptocurrency investments currently range from 1% to 3% of total assets. However, Sonnenfeldt noted that some members are allocating a significant portion of their portfolios to Bitcoin.
Noting that Bitcoin has shown the highest performance among all asset classes in recent years, Sonnenfeldt said, “This is a development that increases institutional interest not only with price movements, but also with Coinbase’s inclusion in major indices.”
While interest in Bitcoin is increasing among TIGER 21 members, investors’ attitudes towards volatility are also drawing attention. According to Sonnenfeldt, while there is concern among those who buy and sell in the short term, long-term investors see every decline as a buying opportunity. “This is already the dynamic that creates the market. While investors with a fundamental belief see declines as opportunities, those who are momentum-oriented can be more cautious,” he said.
While traditional investment instruments are weakening, investments in hedge funds in particular have fallen to 1%. On the other hand, Bitcoin’s digital nature and decentralized structure attract investors.
*This is not investment advice.
