New research from Brava Finance reveals that digital assets have become a strategic priority for wealth managers globally, with 92% actively developing strategies and 96% viewing them as an effective portfolio diversifier.
Almost all (92%) of wealth managers questioned in the US, UK, UAE, Denmark, Brazil, Germany, Italy, Netherlands, Singapore, South Korea, Switzerland, Hong Kong and Luxembourg say they are developing a digital asset strategy, with 16% claiming to have a well-defined strategy already in place.
More than eight out of 10 wealth managers (84%) already have some allocation to digital assets, the research from Brava Finance found.
Brava Finance, whose platform helps users access stablecoin-based credit strategies through decentralized finance (DeFi), has launched its Stablecoin SMA and first credit fund, which offers institutional-grade access via a regulated Cayman vehicle. The fund employs leading custody solutions such as Fireblocks and Northern Trust.
More than a third () hold between 1% and 2% in their investment portfolios, the same proportion (36%) holds between 2% and 3%, with 6% holding between 3% and 4%.
Over the past 12 months, 84% of wealth managers have increased their allocations to digital assets. All said they will increase their allocation to digital assets in the next 12 months.
The study found that in five years’ time, all allocations will have increased, with the largest growth in the 2% to 3% range to 46% from 36% currently
Bitcoin’s recent record valuations were a catalyst for many, stimulating conversations according to 98% of wealth managers, which for 28% were “serious, strategic conversations” on the subject.
The two key reasons wealth managers gave for considering digital assets were the strong performance of some digital assets and the positive sentiment that President Donald Trump has shown towards digital assets.
The next top-rated factors in order of importance, were the improving regulatory environment, and the increasing number of traditional financial companies entering the market.
A growing number of digital assets – such as stablecoins – have been identified as both robust and stable. Many wealth managers have been motivated to develop their digital asset strategies by the potential to improve risk adjusted returns (52%) and to seek a diversified source of yield (36%) for their clients.
Almost all (96%) of wealth managers agree (18% strongly) that digital assets are an effective way to diversify investment portfolios.
Nine out of 10 (88%) say they are concerned about Bitcoin’s fall from recent all time highs, and as a result, 82% are looking for alternatives, such as stablecoins,
The greatest barriers to wealth managers’ strategies being built are regulatory uncertainty, custody and security, a lack of internal knowledge, volatility, and ESG and reputational concerns.
Implementation is more likely to be blocked by internal processes – or a lack of them – with internal sign-off and governance challenges, a lack of clear operational process and concerns over vendor reliability being the top three concerns.
Strategies are not being held back by a overly-cautious customer base, as 98% of wealth managers say their clients and trustees are pressuring them to consider digital asset strategies.
Graham Cooke, CEO and Founder at Brava, said: “Wealth managers around the world have recognised that certain digital assets such as stablecoins are both robust and stable.
“They are now seeking to build digital asset strategies that will help them to deliver a diversified source of yield and improve risk adjusted returns for their clients.”
Brava Finance’s first fund is a Cayman-regulated credit fund designed to offer secure, professional access to crypto markets without the volatility. It is built entirely on Brava’s on-chain stablecoin credit & risk infrastructure.
It targets 8% to 12% annual returns, offers next day liquidity, is fully diversified and institutionally structured with no directional exposure to Bitcoin or other volatile assets.
Returns are powered by 100s of established blockchain-based collateralized lending markets—similar to Lombard loans in traditional finance. Crypto holders such as Bitcoin owners deposit their assets into smart contracts and borrow stablecoins against them, paying interest. If their loan-to-value ratio becomes risky, the system automatically and orderly liquidates collateral—eliminating default risk.
