Pictet Group, the Swiss wealth manager, is cautioning against crypto investments amid the recent industry turmoil.
“Crypto will be an asset class that we cannot ignore, but today I don’t think there is a place for private bankers and for private bank portfolios,” Tee Fong Seng, chief executive officer at the Geneva-based firm’s Asia wealth management arm, said on a panel at the Bloomberg Asia Wealth Summit in Singapore on Thursday.
The crypto industry has seen a meltdown this year amid crashing valuations, the failure of hedge fund Three Arrows Capital and other companies, and numerous attacks by hackers. Between Bitcoin’s November peak and late June, US$2 trillion ($2.75 trillion) was wiped from the combined market value of crypto assets.
Banking giants shunned crypto for years -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon famously called Bitcoin a “fraud” in 2017.
But with the asset’s surge in the past three years, some started changing their stance. Most recently, Julius Baer Group Ltd. said it is working on offering services in digital assets to its wealthy clients, while Fidelity Investments is preparing to launch a product that will allow Bitcoin investments in workplace retirement accounts. Citigroup Inc. and Morgan Stanley have also begun helping rich clients bet on crypto.
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Still, trading tokens remained challenging.
“If you look at the volatility for the last two years, you can make a lot of money, you can lose a lot of money,” Tee said, while adding that Pictet has a team monitoring the market. “The question is, when do we bring the clients into the picture?”
Veteran investor Jim Rogers is among those wary of diving in.
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“My wife invested in crypto of all things,” Rogers told another panel at the wealth summit. “I don’t invest in them because the bulls say there’s going to be money. My answer to that is if and when all our money is on the computer, it’s going to be government money.”
Web3 Interest
Not all have been deterred. Venture capital funds and institutions are getting more interested in the crypto space, said Nanda Ivens, chief marketing officer at Indonesian digital trading platform Tokocrypto. As an example, he cited Indonesian crypto fund Cydonia Capital recently raising US$100 million.
“There is a lot of interest for Web3 projects, especially when there are positive, good deal flows coming through those Web3 venture capital funds,” Ivens, who advised Cydonia, said at the summit in reference to a potential decentralized internet.
Others speaking at the gathering weren’t optimistic about prospects for the digital assets over coming months, despite a recent rally.
“I am pretty bearish,” said Rich Teo, co-founder and CEO of Paxos Asia, a blockchain infrastructure provider. “I think there will be more deleveraging of crypto.”
