The cryptocurrency investment landscape in Chile is rapidly evolving. As stated by Christopher Storaker, the CEO of Arch Finance, a prolific crypto investment firm in the South American nation, high-net-worth individuals in Chile are expressing an increasing enthusiasm for crypto investment.
Behind this shift lies a heightened familiarity and belief in the potential of cryptocurrencies. Professional investors recognise the attributes of this nascent technology and its ability to diversify their investment portfolios. Evidently, Arch Finance has observed a marked rise in the number of family offices showing interest in cryptocurrencies. While in 2020, only 23% of family offices intended to amend their investment strategies to include cryptocurrencies, the figure surged to 46% by 2022.
In an intricate study conducted by Arch Finance, it is revealed that even a slight exposure to crypto assets expands investment returns significantly. Traditional portfolios, comprised of 60% stocks and 40% fixed income, witnessed heightened performance with a nominal 1-5% exposure to cryptocurrencies. Such minimal exposure potentially enhances the portfolio returns of family offices by 6-12% annually, depending on their level of exposure to cryptocurrencies.
Storaker projected that the latent demand for cryptocurrencies is currently burgeoning as sophisticated institutional players make their entry into the market. Coincidentally, crypto adoption in Chile is on an upward trajectory, partly fuelled by Mercado Pago, the fintech arm of the LATAM e-commerce titan Mercado Libre.
The newly-minted “Fintech Law”, signed into effect by Chilean President Gabriel Boric gives proper legal status to crypto assets. The acclaimed Chilean exchangeBuda commended this legislation for its clear guidelines on exchange activities. According to the platform, the Fintech Law gives legitimacy to crypto assets, allowing exchanges to offer them to their customers, provided they comply with relevant obligations. Many believe this law has carved a path for growth and development in the crypto market.
In 2021, the country’s leading MP and opposition party leader admitted to owning Ethereum (ETH) tokens, solidifying the growing interest in cryptocurrencies. Further, earlier this year, the crypto exchange giant Bitfinex executed an investment deal with the Chile-based crypto player Orionx, thus gearing up its presence in the burgeoning market. As Chile’s interest in crypto continues to rise, it would be exciting to watch how this trend evolves and forms a significant part of the investment options.