Asia's Wealthy Shift 20% From US Dollar to Gold, Crypto, China

High-net-worth clients across Asia are gradually pivoting away from US dollar-based investments, favoring gold, cryptocurrencies and Chinese assets instead, according to financial services giant UBS Group. This shift is driven by rising geopolitical uncertainty and persistent market volatility, which have prompted investors to diversify their portfolios. Amy Lo, the Swiss bank’s co-head of wealth management for Asia, highlighted that investors are now seeking broader exposure across alternative asset classes, including crypto, commodities and other currencies.

Lo emphasized that volatility is a persistent factor, prompting clients to rebalance their portfolios toward perceived safe havens and growth opportunities in new regions. China, after years of muted interest, is also regaining traction among the ultra-wealthy. Lo noted that clients who previously avoided exposure to China are now proactively asking about investment opportunities. This renewed interest is further fueled by the performance of China's benchmark index, which has emerged as one of the world’s top performers in 2024.

The shift towards gold, crypto, and Chinese assets is a strategic response to the current geopolitical landscape, as investors seek to protect their wealth and capitalize on emerging opportunities in the Asian market. This trend is part of a broader movement away from US-centric assets, with investors looking for alternative currencies and assets to hedge against market uncertainties. Gold, in particular, has become increasingly popular among UBS's high-net-worth clients.

Christina Au-Yeung, head of Investment Management Services at Morgan Stanley Private Wealth Management Asia, noted that a recent tariff truce between the US and China has created renewed investor optimism. This optimism is reflected in the emergence of interesting investment themes in China. Au-Yeung also pointed to a growing risk-aware mindset among Asia’s wealthiest clients, recommending a balanced portfolio allocation that includes 40% fixed income, 40% equities, 15% alternatives and the remainder in cash or equivalents.

In a recent note, Galaxy Digital analysts said Bitcoin is increasingly being viewed as a digital store of value, noting growing interest from institutions, exchange-traded funds (ETFs) and even governments. Ian Kolman, co-portfolio manager at Galaxy, stated that Bitcoin’s supply and demand dynamics are solidifying its place as a mature digital store of value. Supporting this view, BlackRock’s head of thematics and active ETFs, Jay Jacobs, noted that nations are increasingly diversifying away from US dollar reserves, turning instead to assets like gold — and now, Bitcoin (BTC) — as part of a broader shift in reserve strategy.