As bitcoin prices rise, wealthy investors start to take a look

Cryptocurrencies, which were originally a way of doing business outside of the financial system, are increasingly being viewed as a similar asset to private equity or venture capital.

Read Also: Why February Could Be Very Big For Bitcoin?

Rich people who embrace cryptocurrency, credit, want transparency and they want to be able to plan for it.

The value of cryptocurrencies has increased. Within a decade, they went from a fringe obsession that allowed coin holders to conduct business, outside the financial system to an alternative investment that is managed as if it were any other investment. 

It didn't hurt that the price of a single Bitcoin went from zero to more than $ 30,000 at the time.

But if wealthy investors are increasingly looking at cryptocurrencies the way they see other high-risk assets, such as private equity and venture capital, then this raises a new question for the people who manage their assets: 

How can an entirely modern but volatile asset fit within the law structures. Dating back a century or more?

Real estate attorneys, trust officials, and financial planners are just starting to consider the implications of including Bitcoin and other cryptocurrencies.

Such as Ether and Ripple, in portfolios as well as trust funds, which have stricter rules and stricter penalties for errors.

Currencies still have a way to go before they become major investments. But giving some investors comfort is trusteeship and other financial services provided by back offices that reduce the risk of losing or stealing currencies.

As Bitcoin gained more mainstream adoption, participants were now more sophisticated investors. They want to treat it like any other asset. They want transparency, and they want to be able to plan for it.

In some ways, this conflicts with the original goal of cryptocurrencies, which existed outside the traditional financial system that provided investment advice and trust services. With their keys, cryptocurrencies are, in some ways, more like old bearer bonds.

These bonds are issued by a company or government, but they are not registered as a regular bond. Alternatively, the certificate holder can redeem the bond for its full value. This put an early bonus on not losing that paper.

Today, it appears that people who own about 20 percent of the existing 18.5 million Bitcoins have lost their keys or passwords to about $ 140 billion of those coins.

Both large financial services firms and boutique consulting firms aim to reduce management risks while capitalizing on the broader interest in investing in cryptocurrencies and underlying blockchain technology.

Is Bitcoin still viewed as an adventure investment mode?

The only thing that gave him comfort was creating a more traditional financial infrastructure around the basics of owning Bitcoin. There were some drawbacks. The trading tools were not very developed. There was no transparency about the fees. It was hard to figure out how the nursery worked. These are things we usually take for granted.

There were many reasons for concern. One of the most important of these problems was the bankruptcy of the Mt. Gox, which left cryptocurrency holders on that exchange trying to find passwords for hundreds of thousands of Bitcoin, which was worth millions at the time but billions now.

For wealthy investors, guarding the keys is just the beginning. They have to find a way to treat digital assets like other investments in their portfolios. This will allow them to pay any tax owed on them but also to make plans for gifts and bequests for the heirs through the estate plan.

As the asset class becomes increasingly prevalent, it is crucial to consider it within the context of estate planning. You need to make a plan. There are many cases of people dying without anyone else having the keys or access.