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Ultra-rich Latin Americans lead the way in crypto investing

Ultra-rich Latin Americans lead the way in crypto investing

A higher number of ultra-wealthy Latin Americans are investing in crypto-assets than their counterparts in any other region in the world.

More than a third (33%) of advisors and private bankers catering to Latin America’s rich said that their clients had increased their investments in cyptocurrencies in 2017 in comparison to the global average of 16%, according to Knight Frank’s 2018 edition of its Wealth Report.

The survey is based on responses from more than 500 private bankers and wealth advisors who represent a total of 50,000 wealthy individuals with a combined wealth of more than $3 trillion.

The table below shows the percentage difference between respondents reporting an increase in exposure to cryptocurrencies and those reporting a decrease in 2017.

Latin America 33%
Russia and CIS countries 27%
Africa 24%
North America 20%
Middle East 7%
Australasia 6%
Europe 6%
Asia 5%

Regulation has yet to come into play for Latin American investing in cryptocurrencies, while Asian governments have taken more of a stand. South Korea has threatened a ban on Bitcoin trading and China has banned domestic exchange businesses. 

On Wednesday, March 9 the Securities and Exchange Commission in the US said it would require digital asset exchanges to register with the agency as those assets could be considered securities. There is still speculation on whether securities law apply to crypto assets.

Further, the survey also found that 43% wealth advisors catering to the rich in Latin America said their clients were happy to take on more risk.

Here is a breakdown of how Latin Americans’ exposure to investments has changed* over the past 12 months, according to their advisors.

Asset Class Latin America Global Average
Equities 62% 52%
Bonds 19% 6%
Property 76% 40%
Private Equity 48% 39%
Cash 29% 29%
Gold 5% 15%
Other investments (art,wine,cars) 19% 29%
*The percentage is the difference between respondents reporting an increase in exposure and those reporting a decrease.

LatAm wealth stats

The survey also highlighted the bounce-back of the ultra-wealthy population, which it characterizes as $50 million and above, in Latin America and the Caribbean in 2017.

The number of individuals in this category in the region grew 20% year on year in 2017 to 4,220. The total number of ultra-wealthy individuals is still lower than in 2012 when there were 5,380 individuals with that amount of wealth in the region.

That the figure is expected to grow by 30% over the next five years, the said said.

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