Growing crypto interest among wealthy Chileans, expert says.

Growing crypto interest among wealthy Chileans, expert says.

The Growing Interest of High-Net-Worth Individuals in Crypto Investment in Chile

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“High-net-worth-individuals” in Chile are showing a growing interest in crypto investment, according to Christopher Storaker, the CEO of Arch Finance, a crypto investment firm with a presence in the Latin American country. This surge in interest can be attributed to a significant change in the mentality of professional investors who recognize the potential of tokens in diversifying their investment portfolios and the advantages of blockchain technology.

The shift toward crypto investment can be seen in the increasing number of family offices in Chile interested in cryptocurrencies. Arch Finance reported that the percentage of family offices intending to make changes to their investment strategies or portfolio allocations doubled from 23% in 2020 to 46% in 2022. Storaker further explained that a minimal exposure to cryptoassets, ranging from 1% to 5% in traditional portfolios dominated by stocks and fixed income, can significantly boost portfolio performance.

According to Storaker, adding crypto exposure to family office portfolios could potentially increase annual returns by 6% to 12%, depending on the level of exposure to cryptocurrencies. This demonstrates the value that cryptoassets can bring to high-net-worth individuals and provides a compelling reason for them to explore this emerging asset class.

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Moreover, the demand for crypto is expanding as more professional and sophisticated institutional players enter the market. This influx of experienced participants further solidifies the credibility and attractiveness of the crypto industry in Chile.

Crypto Adoption in Chile: A New LATAM Crypto Player?

Chile is experiencing a rise in crypto adoption, evident in various developments within the country. In March, Mercado Pago, the fintech wing of the crypto-oriented LATAM e-commerce giant Mercado Libre, introduced crypto trading functionalities in its app specifically for Chilean users. This move enables users to buy and sell cryptoassets starting from 50 Chilean pesos (approximately $0.06).

Additionally, Chilean President Gabriel Boric signed the “Fintech Law” at the end of last year, granting cryptoassets a legal status as “digital financial assets.” This legislation provides much-needed clarity on the legality of exchange activities in Chile, fostering the growth and development of the crypto market.

Buda, the most prominent crypto exchange in Chile, has praised the Fintech Law, comparing it favorably to similar legislation in the United States. The law considers crypto assets as financial instruments that exchanges can offer, as long as they comply with relevant obligations. This recognition further reinforces the legitimacy and acceptance of cryptocurrencies within the country.

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The growing adoption is not limited to individuals but has also reached political circles. In 2021, a leading MP and opposition party leader publicly admitted to owning Ethereum (ETH) tokens. This demonstrates the increasing acceptance and understanding of cryptoassets among influential figures.

Furthermore, notable partnerships have emerged in the crypto industry in Chile. Bitfinex, a prominent global crypto exchange, struck an investment deal with Orionx, a Chile-based crypto player. These collaborations foster innovation and strengthen the local crypto ecosystem, positioning Chile as a significant player in the Latin American crypto market.

In summary, the blockchain industry in Chile is experiencing remarkable growth, attracting high-net-worth individuals and institutional players alike. The changing mentality of professional investors towards crypto, coupled with supportive regulations and increased adoption, has created a conducive environment for the expansion of the crypto market in the country. As the industry continues to mature, the potential benefits provided by cryptoassets in portfolio diversification and enhanced returns cannot be ignored. Chile is emerging as a new crypto player in Latin America, with a promising future in the world of blockchain technology.

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