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UBS Clients Allocate 5% of Assets to Cryptocurrencies for Diversification

Coin WorldWednesday, May 14, 2025 2:12 am ET

1min read

UBS, a prominent global wealth manager, has confirmed that its affluent clients are increasingly allocating up to 5% of their assets into cryptocurrencies as part of their diversification strategy. This trend underscores a significant shift in investment behavior, as wealthy individuals seek alternatives to traditional fiat currencies, particularly in light of growing concerns about the US dollar's stability.

The 2025 Global Investment Returns Yearbook by UBS highlights the rationale behind this shift. The report identifies cryptocurrencies as a hedge against inflation and currency volatility, making them an attractive option for investors looking to diversify their portfolios. The inclusion of digital assets in investment strategies is seen as a means to mitigate risks associated with traditional markets, which have shown high correlation and vulnerability to economic shocks.

UBS notes that the structure of modern portfolios has evolved to include assets with low correlation to traditional markets. Cryptocurrencies, once considered speculative, are now recognized for their potential to offer asymmetric returns and act as hedges against systemic risks. This shift reflects a broader trend among high-net-worth investors who are increasingly viewing digital assets as a viable component of their investment strategies.

While UBS remains cautious about direct crypto trading, the bank encourages its clients to gain exposure to digital assets through regulated vehicles or indirect means. Initiatives like UBS Tokenize, which focus on the tokenization of traditional financial instruments, provide a compliant and risk-managed way for clients to engage with cryptocurrencies. This approach aligns with UBS’s commitment to compliance and risk management, ensuring that clients can benefit from the potential of digital assets without exposing themselves to unnecessary risks.

Legal expert John E. Deaton has emphasized the changing risk landscape, stating that it is now far more risky to have zero exposure to crypto than to allocate a small percentage of one's net worth to it. This perspective reflects the growing acceptance of cryptocurrencies as a legitimate investment option, even among traditional financial institutions. As younger wealthy investors become more inclined to allocate capital into blockchain technologies, the inclusion of cryptocurrencies in diversified portfolios is becoming normalized.

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