The traditional wealth management and private banking world, much of which is hard-bitten and twice shy when it comes to cryptocurrency investing, is under mounting pressure again to deliver digital assets to wealthy clients, particularly in crypto hotspots like Dubai, Switzerland and Singapore.
Swiss software firm Avaloq, which serves many private banks and wealth managers, examined high net worth (HNW) investing attitudes in the UAE (based on surveys of 3,851 investors and 456 wealth professionals conducted in February/March 2025), and found that while demand for digital assets in that region is unusually high (39% of wealthy clients hold crypto), only 20% of those crypto investors used a traditional wealth manager.
The UAE, known for its oil-rich, ultra-high net-worth family offices and a low tax center for expat workers, is also quickly becoming one of the world’s hottest crypto hubs, with Dubai offering a clear regulatory framework in the form of the Virtual Assets Regulatory Authority (VARA), which has been in place since 2022.
These days, the kids of ultra-high net-worth families are educating their elders about crypto – for example, the Trumps. Against this backdrop, Avaloq’s UAE snapshot found that 63% of investors have switched managers or are considering doing so. The reason is partly because their questions about crypto are going unanswered, according to the survey.
“As crypto has evolved as an asset class, there has been a growing need among private banking relationship managers to cater to clients who are basically not being served,” said Akash Anand, head of Middle East and Africa at Avaloq, in an interview with CoinDesk.
“Hence there has been a rush among traditional wealth managers to get equipped to offer crypto.”
The roadblocks
So why weren’t these traditional financial institutions serving what their clients want? The simple answer is that crypto, by its nature, is volatile, and much of the technology is complex to navigate.
In addition to crypto’s nerve-jangling volatility, there’s also the uncertainty associated with managing wallets, private keys, and unfamiliar custody arrangements, which causes headaches for managers and clients alike. For UAE investors who do not hold cryptocurrency, the top reasons include market volatility (38%), a lack of knowledge (36%), and distrust in exchanges (32%), according to Avaloq.
The software firm is capitalizing on the opportunity created by a mismatch between the products offered by traditional institutions and the demand from their clients.
For example, Avaloq has successfully integrated crypto custody hand-holding platforms within financial institutions over the past several years, utilizing crypto safe-keeping technology from Fireblocks and collaborating with firms such as BBVA and Zurich Cantonal Bank.
Changing landscape
With investor appetite shifting to add more exposure to digital assets, the financial institutions are finally taking notice, as opportunities are plentiful in the sector.
There is “a healthy pipeline” of private banks and financial firms looking to either customize their core system with Avaloq’s crypto custody tech or use the firm’s pre-figured platform, Anand said.
However, numerous opportunities in the wealth sector remain untapped. “Firms are looking to create a one-stop shop integrated with their existing e-banking systems,” Anand said.
And why wouldn’t investors demand more from their advisors? The crypto wealth is expanding, thanks to market rallying after the brutal crypto winter and bitcoin hitting its new all-time high this year. More millionaires are being created through the new age of digital asset investing.
In fact, the global population of crypto millionaires has reached 241,700, a 40% increase from the previous year, according to the Crypto Wealth Report 2025 by Henley & Partners. The report also ranked Singapore, Hong Kong, the U.S., Switzerland, and the UAE as the top five destinations for digital asset investors.
With the crypto industry maturing after 2021’s spectacular bull run and the subsequent crash, the digital assets sector is now a serious contender for inclusion by investors, particularly as the sector becomes increasingly more dominated by institutional money.
“There have been some quite spectacular crashes involving certain crypto exchanges, and that has created a lot of trust issues. Our research shows that there is an opportunity for banks and wealth managers to step in and provide that trust in the form of fully integrated, secure and compliant custody.”