Cryptocurrencies have soared in value. In a decade, they’ve gone from a fringe obsession that allowed coin holders to conduct business outside the financial system to an alternative investment managed as if it were any other investment. It hasn’t hurt that the price of a single Bitcoin has gone from zero to over $30,000 in that time.
But if affluent investors are increasingly seeing cryptocurrencies the way they see other high-risk assets, like private equity shares and venture capital, that raises a new question for the people who manage their assets: How can a completely modern but volatile asset fit into legal structures that date back a century or more?
Estate lawyers, trust officers and financial planners are just beginning to consider the ramifications of including Bitcoin and other cryptocurrencies, like Ether and Ripple, in portfolios as well as trusts, which have more exacting rules and stringent penalties for mistakes.
The currencies still have a ways to go before they become mainstream investments. But giving some investors comfort are the custody and other back-office financial services that lower the risk of the currencies being lost or stolen.