Crypto Biz: High-net-worth individuals rush to digital assets while financial advisers lag behind
High-net-worth individuals are adopting cryptocurrency at a rapid pace that outstrips their financial advisers' comfort levels, as OKX secures fresh investment and Strategy allocates significantly more resources to preferred share repurchases.
High-net-worth individuals seem to be growing more confident in their cryptocurrency holdings, despite their financial advisers failing to match this enthusiasm. Recent research from CoinShares reveals that most wealthy individuals spanning seven leading global economies have already acquired digital assets, with a significant portion intending to boost their holdings throughout the current year.
These revelations emerge at a time when capital flows into cryptocurrency continue through various channels, despite a more challenging market environment. Bitcoin is attempting to sustain momentum following its strongest quarterly performance since 2017, all while Treasury yields hover north of 5%, and OKX has successfully secured additional capital at a $25 billion company valuation.
At the same time, Strategy is directing more capital toward its preferred stock holdings. Last week, the company allocated over six times more funding to STRC share repurchases compared to its Bitcoin acquisitions.
Bitcoin's upward momentum faces headwinds from 5% Treasury yields
Bitcoin has just wrapped up its strongest third quarter performance since 2017, though continuing the upward trajectory may present challenges as Treasury yields exceeding 5% provide investors with an increasingly compelling alternative to risk-oriented assets, per analysis from Delphi Digital.
Delphi highlighted Bitcoin's 43% gain during the third quarter along with three straight weeks of advances, yet cautioned that "the grind higher is happening against real resistance." This headwind encompasses the Federal Reserve's rate increase in September as well as Treasury yields reaching levels not seen in multiple decades.
That said, Vanessa Grellet from Arche Capital emphasized that the debasement trade, which prioritizes scarce assets like Bitcoin and gold as protection against the eroding purchasing power of fiat currencies, isn't reliant on low interest rates.
The interest rate forecast has evolved since that time. September's payroll data revealed only 29,000 jobs were created, falling significantly short of the 80,000 expected, substantially reducing the probability of a rate hike in October, based on CME FedWatch data. Additionally, New York Fed President John Williams indicated there was no immediate need for further rate increases.
Currently, high Treasury yields continue to pose obstacles for risk-based assets. Bitcoin momentarily surpassed $87,000 during the previous week before retreating to under $83,000 by Wednesday.
High-net-worth investors are adopting crypto at a faster pace than their financial advisers
The majority of wealthy investors spanning seven leading global economies possess digital assets, with cryptocurrency comprising approximately 10% of their investment portfolios on average, based on recent CoinShares survey findings.
The research encompassed 2,230 investors holding at least $500,000 in investable assets from the US, UK, France, Germany, Italy, Sweden and Switzerland. Digital asset ownership varied from 54% among Swedish respondents to approximately 70% across the US, UK, Germany and Switzerland. Across five of these seven nations, no less than 85% of current crypto holders indicated plans to expand their exposure during 2026.
Investors seem more at ease with cryptocurrency than certain financial advisers they work with. Roughly four out of every 10 survey participants in Switzerland, France, the US and Germany who engage with an adviser characterized them as excessively cautious regarding digital assets.
Ric Edelman, who founded the Digital Assets Council of Financial Professionals, challenged the survey's conclusion that crypto represents 10% of the typical portfolio, stating his own research indicates present allocations between 2% to 5% are more typical. Nevertheless, Edelman advocates for substantially higher allocations ranging from 10% to 40%, based on an investor's willingness to take on risk.
OKX secures additional funding at $25 billion company valuation
OKX obtained an amount not publicly disclosed at a $25 billion valuation, continuing a funding round that secured $200 million from Intercontinental Exchange back in March.
Current partners and investors took part in this extension, among them Standard Chartered's SC Ventures, Qube Research & Technologies, Ripple and stablecoin provider Circle. OKX chose not to reveal the specific amount raised during this latest funding round.
This capital injection arrives as OKX expands its presence in traditional financial markets. This Monday, a joint venture between OKX and ICE submitted documentation to the US Securities and Exchange Commission seeking to establish a tokenized stock trading platform utilizing the agency's new innovation exemption. The platform's debut remains contingent upon the filing and exemption approval.
Strategy allocates six times more capital to STRC repurchases than Bitcoin acquisitions
Strategy deployed $176.3 million to repurchase 1.77 million STRC shares during the previous week, exceeding by more than six times the $28.7 million allocated to acquiring 334 Bitcoin.
This transaction elevated Strategy's total holdings to precisely 848,000 BTC, as documented in a Monday 8-K filing submitted to the SEC. Bitcoin acquisition activity has decelerated markedly, with Strategy's total holdings increasing a mere 0.2% throughout the third quarter after purchases of 7,218 BTC were partially counterbalanced by the liquidation of 5,553 BTC.
STRC, by contrast, has rebounded to levels approaching its $100 par value. The shares were changing hands around $99.53 following a decline to approximately $75 during late June.
Strategy additionally submitted a proxy document requesting shareholder authorization to distribute dividends on a daily basis for STRC, STRF, STRK and STRD. STRC presently distributes dividends twice each month, whereas the remaining three pay on a quarterly schedule. Shareholders are set to cast votes on this proposal on Oct. 28.
Should the measure receive approval, daily STRC dividend distributions would commence in November, with STRF, STRK and STRD following in January. Strategy clarified that these modifications would have no impact on dividend rates or its total payment commitments, though they could influence reinvestment timing, liquidity conditions and share price stability.
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