By Kepha Muiruri For Citizen Digital
The volatility created by the stay of the COVID-19 pandemic has seen rich individuals in the country move their wealth into crypto assets.
This is according to a new survey by the Standard Chartered Bank dubbed the Wealth Expectancy 2021 Report.
According to the survey covering 1598 Kenyan respondents with an average net worth of Ksh.46.2 million ($407,000), 98 per cent of people took at least one action related to their finances last year with the top action being researching new financial products.
The top motivators for the change have included the rethinking of overall priorities, adapting finances to challenges such as market volatility and low-interest rates alongside wanting to make their finances more future proof.
43 per cent of new individuals exploring new asset classes indicated they invested in cryptocurrency ahead of taking new strategies such as short-term trading in the stock market.
59 per cent or roughly six out of every 10 affluent persons involved in the study say the pandemic has made them less confident about their finances with the majority pre-empting a decrease in their return on investment.
Despite the high incidence of pessimism, Kenya’s affluent class plans to retire early with 45 per cent of the respondents indicating plans to retire before the age of 65.
62 per cent of those saving for retirement are expected to rely on investment income ahead of cash savings and rental income.
The switch in asset allocation by the wealthy towards cryptocurrencies’ mirrors the growing allure of the asset class over the years.
While cryptocurrencies are highly volatile in valuation, the asset class serves as an important hedge against drawbacks such as inflation and macroeconomic volatility.
According to cryptocurrencies’ tracker CoinLore, over 7,600 crypto coins exist with a market capitalization north of $2 trillion.
Bitcoin and Ethereum are some of the most popular coins and also lead by virtue of having the highest market valuations.
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