Family Offices Embracing Crypto: Oxido Solutions as a Strategic Trading Bot Partner

1. INTRODUCTION

Family offices, known for their dedication to preserving and growing wealth across generations, are increasingly turning their attention to innovative investment opportunities in the cryptocurrency market. Oxido Solutions has seen a notable rise in interest from these private wealth entities, particularly in our crypto trading bot strategies and those offered by our partner quant firms. These strategies, accessible through Separately Managed Accounts (SMAs), offer tailored solutions that align with the unique needs of family offices.

In this article, we’ll explore the world of family offices—where they are located, the strategies they employ in the crypto market, and the factors driving their growing interest in digital assets. We’ll also detail how Oxido Solutions supports them in achieving their investment goals and provide a future outlook on the evolving role of family offices in the crypto space.

2. UNDERSTANDING FAMILY OFFICES

Family Offices are private wealth management firms that cater exclusively to ultra-high-net-worth families. While relatively rare in the 1980s, their numbers have grown significantly. Today, there are an estimated 15,000 Family Offices worldwide, managing a combined $5.9 trillion in assets, according to a report by Forbes citing the Economist Intelligence Unit and DBS Private Bank.

North America leads the way, home to approximately 45% of Family Offices, followed by Europe with 30%. Asia-Pacific, fueled by the rapid rise of wealth in countries like China and India, now accounts for 20% and continues to grow.

The core mission of Family Offices is to protect and grow wealth across generations. Unlike traditional investment firms, these offices provide a wide range of services, including portfolio management, estate planning, philanthropy, and tax optimization. They are also financial powerhouses—72% of Family Offices report managing a net worth of $1 billion or more.

Family Offices often adopt a long-term investment approach, emphasizing diversification to reduce risks and tap into new opportunities. This strategic mindset has increasingly led them to explore alternative investments like private equity, real estate, and, more recently, cryptocurrencies, as they look to secure and grow wealth in an evolving global market.

3. THE GROWING INTEREST IN CRYPTO AMONG FAMILY OFFICES

The focus of family offices on diversification has driven many to explore alternative assets like cryptocurrencies, which offer the potential for high returns in a fast-evolving financial landscape. Studies and reports reveal key insights into the increasing interest in digital assets and the factors influencing family offices’ decisions to invest in crypto and blockchain-related technologies.

A 2023 study by Goldman Sachs surveyed 166 family offices globally to examine shifts in investment strategies. The study revealed that 32% of family offices reported exposure to digital assets, including cryptocurrencies, non-fungible tokens (NFTs), decentralized finance (DeFi), stablecoins, and blockchain funds. Additionally, the percentage of family offices actively investing in cryptocurrencies has steadily grown, rising from 16% in 2021 to 26% in 2023. This trend signals a gradual acceptance of digital assets within a traditionally cautious segment of the financial market.

A report by BNY Mellon Wealth Management further highlights the interest family offices have in cryptocurrencies. Among 189 surveyed family offices, nearly 39% were either actively investing in or exploring crypto opportunities. Respondents cited digital assets as a way to diversify portfolios and gain exposure to innovative financial products. Some preferred exchange-traded funds (ETFs) specializing in crypto for their simplicity and regulatory structure, while others opted for direct purchases of cryptocurrencies on exchanges, appreciating the control and flexibility this approach provides.

The growing interest in crypto often stems from a desire to stay ahead of emerging financial trends. Many family offices view digital assets as a complementary addition to their broader investment strategies. Concerns about inflation have also played a role, with cryptocurrencies seen by some as a potential hedge against economic uncertainty. Leadership within family offices, coupled with influence from younger generations, has further driven interest, as both groups advocate for innovation and future-focused investments.

Citibank’s 2024 Global Family Office Survey provides additional context. It found that 24% of family offices favor direct investments in digital assets over ETFs or exchange-traded products. This approach reflects their preference for greater control over their portfolios, allowing for tailored strategies to meet specific goals. Unlike traditional institutional investors, family offices often have the flexibility and risk tolerance to explore less liquid markets and emerging technologies. This enables them to capitalize on the transformative potential of blockchain and cryptocurrencies while aligning with their long-term investment vision.

Geographical differences also play a critical role in shaping crypto adoption among family offices. In the Asia-Pacific region, 37% of family offices are actively investing in or exploring digital assets, with some allocating over 10% of their portfolios to this asset class. In contrast, Latin America sees minimal engagement, with 83% of family offices indicating no strategic interest in digital assets. European family offices occupy a middle ground, with 28% actively engaged in crypto investments, signaling a measured yet growing interest in the space.

Family offices are also expanding their focus beyond cryptocurrencies, showing interest in the broader blockchain ecosystem. Areas like decentralized finance (DeFi) and tokenized real-world assets (RWAs) are gaining traction. Larger family offices, in particular, are exploring RWAs, with 11% reporting exposure compared to just 3% of smaller family offices. This interest highlights their forward-looking approach and willingness to engage with innovative financial technologies that hold long-term potential.

The collective findings from these reports suggest that family offices are cautiously warming to cryptocurrencies and blockchain innovations. Their long-term perspective and ability to adapt quickly to changing markets allow them to navigate the challenges and opportunities in this emerging sector.

4. INVESTMENT STRATEGIES FAMILY OFFICES IN CRYPTOCURRENCIES

As family offices explore cryptocurrencies, they’re adopting a range of strategies to balance long-term growth, diversification, and income generation. Let’s dive into some of the most prominent crypto strategies family offices are pursuing today.

A. Buy & Hold: Long-Term Growth with Stability
The buy-and-hold strategy, or “HODLing” (Hold On for Dear Life) in crypto terms, emphasizes staying invested over the long term instead of attempting to time volatile markets. This approach resonates with family offices due to its simplicity and alignment with long-term investment horizons. It reflects the principle that “time in the market beats timing the market,” allowing assets to grow as the crypto ecosystem matures.

Family offices that adopt this strategy typically pair it with top-tier custody solutions to ensure the security of their holdings. This combination of strategic patience and operational safeguards minimizes risk while allowing for steady growth, making it a cornerstone for many institutional portfolios.

B. Venture Investments in the Crypto Ecosystem
Beyond direct ownership of digital assets, family offices are increasingly venturing into early-stage investments in blockchain and cryptocurrency projects. These include equity stakes in crypto companies, seed funding for emerging platforms, and participation in token launches.

This approach mirrors the transformative returns seen by early backers of projects like Ethereum and Solana. It also provides a way to diversify beyond cryptocurrencies while gaining exposure to the innovation driving blockchain technology. By focusing on scalable and impactful ventures, family offices can align their portfolios with the future of finance while tapping into the exponential growth potential of emerging projects.

C. Passive Income
Passive income strategies are a compelling way for family offices to maximize the value of their cryptocurrency holdings. These methods allow wealth managers to generate consistent returns, even during market downturns. Three key methods stand out:

Staking
By locking digital assets to support blockchain network operations, investors earn staking rewards, often in the form of annual percentage yields (APYs) ranging from 3% to 10%. Beyond financial returns, staking gives participants voting rights in governance decisions, aligning financial incentives with network participation. Direct participation in native staking provides full access to rewards without the management fees typically associated with Exchange-Traded Products (ETPs) or Notes (ETNs).

Yield Farming
Family offices also explore yield farming, where liquidity is provided to decentralized finance (DeFi) protocols in exchange for returns. While potentially lucrative, yield farming involves higher risk and operational complexity. To mitigate risks, family offices focus on established platforms and may use DeFi insurance or diversify across multiple protocols to protect against smart contract vulnerabilities.

ETFs and ETPs: Simplified Access with Limitations
Family offices often use Exchange-Traded Funds (ETFs) and Exchange-Traded Products (ETPs) for simplified exposure to cryptocurrencies. While these products offer accessibility and regulatory oversight, they generally include management fees that reduce returns.

Fully Automated Crypto Quant Strategies
Quantitative trading strategies offer a passive approach to generating income through algorithmic trading. These fully automated systems execute trades based on pre-programmed rules and market conditions, leveraging data analytics to identify opportunities. Family offices benefit from this approach due to its low correlation with traditional assets and the ability to generate consistent returns across varying market conditions. Quant strategies also provide the added advantage of operating 24/7, ensuring opportunities are captured even in fast-moving crypto markets.

5. WHAT FAMILY OFFICES SEEK IN CRYPTO QUANT STRATEGIES

Since 2023, Oxido Solutions has been dedicated to providing crypto quant trading solutions tailored to the unique needs of family offices. Whether through our proprietary strategies or partnerships with leading quant firms, our expertise gives us a deep understanding of the critical factors family offices prioritize when entering the crypto space. Here are ten key considerations that shape their decision-making process:

A. Fund or SMA
Family offices value flexibility in how strategies are delivered. Some prefer direct exposure through funds, while others opt for Separately Managed Accounts (SMAs) to retain greater control over assets. SMAs offer personalized strategies and transparency, aligning closely with the bespoke nature of family office operations.

B. Focus on Risk Management
Risk management is a cornerstone for family offices venturing into crypto quant trading. These entities seek strategies that mitigate volatility while delivering consistent returns, ensuring alignment with their overarching goal of wealth preservation. By prioritizing risk-adjusted performance, family offices can confidently integrate crypto strategies into their diversified portfolios.

C. Diversification
Diversification remains a key driver for family offices exploring crypto markets. Quant strategies offer a compelling way to reduce reliance on traditional assets such as equities, bonds, and real estate. By introducing exposure to digital assets, family offices can balance their portfolios and tap into the growth potential of an emerging asset class.

D. Verifiable Track Record
A transparent and proven track record is essential for building trust. Family offices require evidence of past performance to evaluate a strategy’s reliability and ability to navigate varying market conditions. Verifiable data reassures decision-makers and supports the case for including crypto quant strategies in their portfolios.

E. Low Correlation with Underlying Assets
Quant strategies with a high risk-return profile that operate independently of traditional market trends are highly attractive. Low correlation with broader financial markets ensures that family offices maintain stability during periods of economic uncertainty, making crypto strategies an effective tool for hedging against systemic risks.

F. Liquidity
Liquidity is a critical consideration for family offices. They require the flexibility to enter or exit positions quickly without being tied to long lock-in periods. Strategies that prioritize liquidity enable family offices to adapt to changing market dynamics or shifting investment priorities without constraints.

G. Custody
Secure custody solutions are non-negotiable for family offices dealing with digital assets. They demand institutional-grade custody providers equipped with multi-signature wallets, encryption protocols, and rigorous security measures to safeguard assets against operational and cyber risks.

H. Round-the-Clock Operation
The crypto market operates 24/7, unlike traditional financial markets with defined trading hours. Family offices value the ability of crypto quant strategies to seize opportunities at any time, ensuring they capitalize on market movements that occur outside regular trading windows.

I. Transparent Reporting and Oversight
Family offices need access to detailed performance metrics and analytics to monitor how strategies align with their investment objectives. Transparency in reporting fosters trust, providing a clear view of how their capital is performing and enabling informed adjustments to investment plans.

J. Scalability
The ability to scale strategies alongside portfolio growth is critical for family offices managing substantial capital. Crypto quant solutions must accommodate increasing allocations without compromising performance, ensuring seamless integration into larger wealth management frameworks.

6. HOW OXIDO SOLUTIONS DELIVERS

To meet the investment needs of family offices, Oxido Solutions provides a range of crypto trading strategies tailored to their specific goals. This chapter explains how our solutions align with the key requirements of family offices.

6. A. Unique strategies with focus on risk management
Oxido Solutions offers multi-strategy trading systems designed with a strong emphasis on risk management. These strategies cater specifically to professional and institutional investors, including family offices. Our approach includes two fully automated scalping strategies focused on Bitcoin Perpetual Futures and Ethereum Perpetual Futures. This enables family offices to diversify their portfolios with trading pairs of the two most popular perpetual futures. Through these strategies, family offices can generate passive income in Bitcoin, Ethereum, and USDT.

Our trading strategies are built to execute quick trades that follow market trends, aiming to capture minor price changes. These strategies are scalable, operate symmetrically on both long and short positions, and run at a low frequency, averaging approximately 100 positions per month. Most positions are opened as limit orders to ensure controlled execution, with a primary stop loss executed as a market order. Additionally, a secondary trailing stop loss is activated when a position reaches slight profitability and is consistently executed as a limit order.

6. B. Risk Profiles Tailored to Family Office Needs
Our strategies support four distinct risk profiles: ultra-low, low, medium, and high risk. The key difference between these profiles lies in the risk per trade, which ranges from 0.75% to 3% of the trading capital, excluding slippage. A higher risk profile offers greater potential returns in favorable market conditions but also increases exposure to potential losses if market movements are unfavorable.

Many family offices aim for annual returns in the crypto market between 20% and 45%, with a maximum drawdown tolerance ranging from 8% to 20%. To align with these objectives, family offices typically choose our ultra-low or low-risk strategy variants, which provide a balanced approach to performance and risk management.

6. C. Low correlation with underlying asset class
In 2024, Oxido Solutions conducted a detailed analysis of its Bitcoin Perpetual Futures strategy, revealing a minimal correlation with Bitcoin’s price movements. Metrics such as Pearson and Spearman correlations, along with Beta and R-squared values, underscore the strategy’s independence from BTC’s volatility. This low correlation offers family offices a unique advantage, providing a consistent return profile that remains stable even during significant market fluctuations. By delivering lower volatility compared to BTC—15.87% versus 51.75% annualized—the strategy reduces exposure to crypto-specific risks while enhancing portfolio diversification.

Designed for long-term stability, the strategy prioritizes risk-adjusted returns and controls drawdowns effectively, making it an attractive option for institutions focused on preserving wealth. While BTC may outperform in specific scenarios like strong bull markets, Oxido’s approach ensures consistent performance across varying conditions, offering reliable returns without the sharp ups and downs of the broader crypto market. This focus on steady growth and minimal dependency on BTC makes it a valuable addition to family office portfolios seeking diversification and resilience.

6. D. Platforms
Oxido Solutions provides its trading strategies through Separately Managed Accounts (SMAs) on Binance, Bybit, and OKX—three of the most liquid platforms for trading crypto perpetual futures. Family offices create two sub-accounts on these platforms, allocate equal funds to each, and Oxido Solutions sends trading signals to the respective sub-accounts through a secure API connection. These signals can be automatically converted into orders if desired by the family office. Each sub-account runs a different strategy from our multi-strategy setup, ensuring that the various components of the strategy operate independently.

These platforms are industry leaders known for their deep liquidity, enabling efficient trade execution even during high market volatility. For family offices, this translates to reduced slippage and better trading outcomes.

To address security concerns, these platforms seamlessly integrate with top-tier custodians such as Fireblocks, Copper, and BitGo. These custodians offer institutional-grade solutions, including multi-signature wallets and insured storage, protecting digital assets from operational risks. This setup allows family offices to maintain full control over their funds without holding them directly on the exchanges while still benefiting from Oxido Solutions’ strategies.

Transparency is another key advantage of Binance, Bybit and OKX. Family offices have real-time visibility into their crypto reserves, with on-chain proof of funds and detailed account statements readily available. This ensures that every trade and asset allocation is fully auditable, providing confidence and trust in the process. By leveraging these platforms, Oxido Solutions delivers a secure, efficient, and transparent solution for family offices seeking to navigate the crypto market with confidence.