How family offices have bundled up against the chill wind of the 'crypto winter'

Asset owners, private and retail investors are still reeling from the volatile domino effects of the deeply interconnected crypto industry which saw $1.3 trillion of its total market cap wiped out this year.
How family offices have bundled up against the chill wind of the 'crypto winter'

In 2021, the digital assets space appeared to be gaining traction with institutional investors. The value of the cryptocurrency market towards the year’s end exceeded $3 trillion and the Bitcoin price hit its highest all-time value of $68,789 in early November.  

However, in May 2022, it was the $40 billion collapse of the Terra Luna stable currency platform that would create a knock-on effect that would trigger the collapse of Singapore-based crypto hedge fund Three Arrows Capital and lead to bankruptcy filings from several of its overleveraged crypto lenders including the Celsius Network and Voyager Digital.

We are currently in what the digital assets industry refer to as a “crypto winter.”

lu-Jin Ong,
Ambitum Capital

Iu-Jin Ong, chief executive at Ambitum Capital Limited, a Hong Kong-based single-family office that took very early exposure in the cryptocurrency space with Bitcoin and Ethereum, told AsianInvestor that his firm did not have any direct exposure to Celsius, Voyager or Three Arrows.

As the digital asset sector grew in 2021, particularly with the trend towards the metaverse and non-fungible token trading, many Asian family offices saw the cryptocurrency space as being at a tipping point for mass adoption.

“Clearly the crypto winter is going to have a slowing effect on the trend towards mass adoption,” said Ong.

In terms of recovery, Ong said his firm does not predict price levels in any market let alone crypto, but thinks, “we are probably seeing the intermediate price bottom being established, so long as there are no further structural failures”.

While acknowledging the impact of this year’s events on the crypto market, a Hong Kong-based single family office investor, who wished to remain anonymous, told AsianInvestor that they believe the macro-economic environment is currently the main influencer on prices in the crypto sector.

“The crypto space has become a bit more institutionalised. It's become part of many people's portfolio, even the diversified investors. When risk assets go down, due to inflation rate hikes, quantitative tightening, the Covid crisis and events like Russia invading Ukraine etc. ... it becomes easier to be a seller than a buyer across equities, real estate, precious metals, and so on. I think that includes crypto,” they told AsianInvestor.

When the macro-economic issues are resolved, “all the risk assets will benefit, and of course that includes crypto,” they said. 


Nothing indicates the ascendance of an asset in the financial system more than a pension fund investing in it.

Unfortunately for the $326 billion Canadian pension giant, Caisse de Depot et Placement du Quebec (CDPQ) they may be hard pressed to recover the $150 million it invested in Celsius Network last October as part of a $400 million funding round co-led by WestCap Investment Partners LLC.

Celsius Network filed for Chapter 11 bankruptcy protection in the Southern District of New York on Wednesday July 20, and all equity holders are likely to be wiped out. The crypto lender was one of the main creditors of Three Arrows Capital Ltd., the hedge fund now being ordered to liquidate after being heavily invested in Luna.

CDPQ has received investor criticisms regarding the level of its due diligence surrounding its investment in Celsius Network.

Henri Arslanian
Nine Blocks Capital

“Clients, like crypto hedge funds or institutional investors, have a role to play in asking the right questions to these crypto platforms as part of their operational due diligence process,” Henri Arslanian, managing partner of crypto hedge fund Nine Blocks Capital Management told AsianInvestor.

“In traditional finance, the prime brokerage industry became stronger and safer after clients started asking the right questions post-Lehman, from counterparty risk to bankruptcy remote vehicles. Hope to see the same in crypto,” said Arslanian.

CDPQ did not respond to AsianInvestor’s request for comment but its spokesperson Maxime Chagnon told Bloomberg, “We understand that our investment in Celsius raises a number of questions. This is something that we take very seriously and we will provide further comment at the appropriate moment. Celsius is currently engaged in a complex process that will take time to resolve.”

Meanwhile, Matrixport, a Singapore-based digital asset financial services platform aimed at institutions, with $10 billion in assets under management, has lodged a claim with the court-appointed liquidator to reclaim outstanding debt following a loan default, alongside other creditors of Three Arrows Capital.

“The outcome of the liquidation process does not impact the solvency of Matrixport and the company continues to operate normally. In fact, we recently appointed a US CEO as part of our international expansion plans,” Ross Gan, head of public relations at Matrixport told AsianInvestor.

Three Arrows Capital did not respond to AsianInvestor’s request for comment.


The collapse of Terra and Luna leading to the demise of Three Arrows Capital, a highly leveraged hedge fund, draws parallels with Long-Term Capital Management collapse in 1998 for Harmen Overdijk, chief investment officer at Leo Wealth.

Overdijk sees the 2022 “crypto winter” as a healthy shake-out for the whole digital asset space.

Harmen Overdijk,
Leo Wealth

“The crypto world has found out in the past 3 months that the 'laws' of financial markets also apply to the new digital asset space. Digital assets are a technological breakthrough, but they are still traded in financial markets by people, which means they are subject to the same dislocations and inefficiencies experienced by all financial assets,” Overdijk told AsianInvestor.

“Traditional macro factors like market liquidity, risk sentiment and interest rates movement also have a big impact on the crypto space. Several relatively new players in the digital asset space discovered the perils of using leverage without proper risk protocols,” he said.

Trent Barnes, principal at ZeroCap which offers crypto asset investment and a custody platform built for family offices, thinks the crypto market needs time to consolidate and find its feet.

Trent Barnes, ZeroCap

“Whether the bottom is in or not, a mean reversion is not unlikely given the significant rate of price depreciation in the last six months,” Barnes told AsianInvestor.

“While some good firms were negatively impacted by the fallout of Terra, Celsius and 3AC, most family offices and institutional investors that we're in talks with understand that the events that occurred are not representative of the space and its participants. Many are still bullish on the space over the medium to long term,” he said.

Unfortunately, the biggest losers of the crypto downturn were the retail investors, said Barnes.


The crypto crash has led to an intensified push by the United States Securities and Exchange Commission to better regulate digital assets, while in Asia digital assets are also coming in for more attention from regulators.

The Monetary Authority of Singapore (MAS) recently reiterated caution against retail investments and said it plans to consult on proposed consumer protection and market conduct measures in the next few months.

Henry Chong,

Henry Chong, the chief executive of Fusang, a Malaysian-based public and private blockchain financial ecosystem for security tokens and digital assets sees regulators’ concerns about ensuring there is sufficient investor protection embedded in the financial transactions which occur within their jurisdiction as completely “understandable”.

“The issue here, and dare I say the perceived “heavy handedness” of MAS is the only way a jurisdictional regulator is able to manage a marketplace which does not have an inbuilt investor protection mechanism,” Chong told AsianInvestor.

Ultimately, Chong sees MAS’ focus to be investor protection, which should be the same objective of all financial intermediaries, be it in the digital space or otherwise.

“For the industry to move forward there needs to be a strong recognition of this, failing which complete bans will simply continue to be meted out, to the detriment of the industry and potential upside loss for investors,” he said.

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