The world's wealthiest investors are increasingly looking to expand their holdings in volatile digital coins, despite a mismatch in the group's knowledge surrounding the asset class. The latest annual Wealth Report survey by Knight Frank indicated that 21% of wealth advisers and private bankers said their clients increased investments in cryptocurrencies in 2017, yet “there’s still a huge amount of misunderstanding" around the blockchain-enabled technology. (See also: Crypto, Cannabis, FOMO Drive New Investor Inflow.)

Nicholas Holt, Knight Frank's head of research for Asia Pacific, told CNBC in an interview on Wednesday that, "although people are getting on the train about investing in cryptocurrencies, perhaps there's not a full understanding of what this could mean to their wealth portfolio."

Crypto bears have warned against investing in digital currency such as bitcoin, the world's largest cryptocurrency by market capitalization, due to the highly speculative nature of its market, wherein they suggest that investors are buying on the mania as opposed to the intrinsic value of the asset. 

Stocks and Property Still Preferred Among World's Wealthiest Individuals

Knight Frank's report suggests that even the wealthiest of cryptocurrency investors are in the dark regarding blockchain, the technology behind bitcoin, which allows transactions to be recorded and maintained. 

In recent months, crypto markets have faced increased government regulation, including a few outright bans on trading digital currency, alongside negative comments from crypto skeptics, including Berkshire Hathaway Inc.'s (BRK.A) Warren Buffett and JPMorgan Chase & Co. (JPM) Chief Executive Jamie Dimon. Despite the criticism, digital currencies such as bitcoin, ethereum and ripple have made their way deeper into the mainstream, marking a major win with a debut on the futures market in the U.S. 

While the heightened popularity of cryptocurrencies such as bitcoin has flooded headlines, the recent report indicated that ultra-rich clients continue to prefer putting their money in equities and properties. 

"That's not surprising due to the fact that equities did very well last year," said Holt. "And property still remains the cornerstone of the most wealthy individuals' portfolios, accounting for up to 50% in many portfolios." (See also: Bitcoin Is ‘Far' From Going Mainstream: BlackRock.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrency.

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