An assessment found that wealthy investors are viewing Bitcoin as a long-term diversification tool rather than a short-term, high-return asset. However, the actual allocation by family offices managing wealthy families' assets remains low.

Cointelegraph reported on Oct. 7 that Kevin Lee, chief strategy officer at crypto exchange BingX, said traditional wealth holders approach Bitcoin with a longer-term perspective than existing crypto investors.

Lee said in a Token2049 discussion that he often meets traditional wealth holders looking for alternative investments, and he viewed them as having so-called "diamond hands." "Diamond hands" refers to an investing tendency to hold assets for a long time without selling easily despite price swings.

He explained that as the Bitcoin market has grown, wealthy investors have begun to see it as a portfolio diversification tool rather than an asset to generate a 10-fold return in a short period. He said they focus on asset allocation rather than short-term gains, such as allocating 5 percent each to gold and Bitcoin.

That tendency also appeared in a recent survey. CoinShares, in a survey of 2,230 investors with investable assets of at least $500,000, found expectations of long-term price gains and diversification were most frequently cited as reasons for investing in cryptocurrencies. Short-term speculation ranked lowest, and 80 percent of digital asset investors who participated in the survey held Bitcoin.

Lee assessed wealthy investors as a potential source of funds that has not yet fully flowed into the crypto market. If their buy-and-hold tendency spreads, he said, more investors could use Bitcoin as a portfolio diversification tool.

Family office investment in cryptocurrencies remains limited. According to a report JP Morgan released in February, 89 percent of 333 single family offices across 30 countries had no allocation to cryptocurrency investments. The average allocation to cryptocurrencies and digital assets stood at 0.4 percent, and only 17 percent of respondents cited them as a core investment theme. This shows the need to distinguish between the long-term holding tendency of high-net-worth individuals who invest in crypto and a broader expansion of investment among the wealthy overall.

Some investors are accepting Bitcoin as a diversification tool, but a gap remains before it becomes a standard asset allocation item for family offices. A key question is whether this will go beyond the long-term holding tendency of existing investors and lead to new investment by wealth holders who have not yet added cryptocurrencies. Whether shifting perceptions of Bitcoin translate into a broader increase in asset allocation is expected to be an indicator of the sustainability of inflows from wealthy money.