Asian Wealthy Class Reduces USD Asset Holdings, Shifting to Gold, Cryptocurrencies, and Chinese Stocks amid Geopolitical Instability.
The trend of "escaping the USD" is rapidly increasing among Asia's wealthy class. According to Amy Lo, Co-Head of Wealth Management for Asia-Pacific at UBS Global, investors in the region are quickly rebalancing their investment portfolios, significantly reducing their dependence on US dollar-denominated assets.
Three key factors driving this trend, according to Lo, include concerns about the sustainability of the US economy, persistent inflationary pressures, and rising interest rate prospects. These factors are encouraging investors to seek alternative asset channels to protect and increase their asset values.
Gold, Crypto, and Chinese Stocks Benefiting from New Capital Flows
Since the beginning of 2024, UBS has noted a strong increase in physical gold and gold ETF demand, particularly in financial centers like Hong Kong and Singapore. Gold, with its traditional role as a safe haven during uncertain times, is becoming a priority choice for many Asian investors amid increasing geopolitical tensions and global economic recession concerns.
Notably, cryptocurrencies are also emerging as a viable alternative to traditional investment channels. Asian investors are increasingly interested in Bitcoin (BTC) and Ethereum (ETH) as tools for portfolio diversification. UBS reports that the proportion of digital assets in client portfolios—especially among younger generations and family offices—is increasing significantly.
Additionally, Chinese stocks are attracting substantial capital, with a focus on technology and consumer companies serving domestic needs. This trend not only reflects confidence in China's growth potential but also accelerates the global "de-dollarization" trend.
Recent surveys support this trend. The May 2025 Bank of America survey shows that, for the first time in 19 years, global fund managers have significantly reduced their USD dependence, with cash allocation in portfolios dropping from 4.8% to 4.5% within just 90 days.
Similarly, a 2025 survey by EY-Parthenon and Coinbase indicates that 86% of institutional investors in Asia surveyed intend to increase their allocation to digital assets in the near future, demonstrating growing acceptance of cryptocurrencies as a mainstream asset class.
