Bitcoin for Family Offices

A family office weighing a new holding for the next generation starts by examining what controls the supply. For bitcoin, the answer is code, not a board or a central bank. The Bitcoin Core source rejects any total above 21,000,000 BTC, issued on a halving schedule that cuts new supply roughly every four years. No equity, private company stake or piece of real estate a family office already holds has scarcity enforced this way, independent of any single owner's decisions.

Institutional demand since the launch of spot ETFs gives that scarcity argument a price signal to point to. The iShares Bitcoin Trust from BlackRock held roughly 66.8 billion US dollars in net assets as of 28 September 2026, with a sponsor fee of 0.25 percent, giving family offices a regulated, liquid entry point that did not exist before 2024.

A family office has more custody choices for bitcoin than for most private assets, and each carries a different risk. Direct self-custody keeps private keys inside the family office but shifts full operational risk, including loss and succession planning, onto the family. A licensed custodian removes that operational burden: crypto custody has been a licensed financial service in Germany under § 1 Abs. 1a Satz 2 Nr. 6 KWG since 1 January 2020, and MiCA licensing for crypto-asset service providers has applied in full since 30 December 2024.

Established institutions now offer that custody directly: Zürcher Kantonalbank holds bitcoin private keys for clients inside its own banking app, and Clearstream Banking offers institutional custody through Crypto Finance (Deutschland) GmbH as MiCA-licensed sub-custodian. A family office choosing between these routes is choosing how much operational risk to keep in-house versus delegate to a licensed bank.

Germany treats a bitcoin sale under the rules for private disposals of other assets. Under § 23 EStG, a gain is taxable only if the holding period is one year or less, and gains under a combined 1,000 euros in a calendar year stay tax free regardless of holding period. A family office planning a multi-generational bitcoin position typically holds past that one-year mark, which removes German capital gains tax from the picture entirely for that position, a materially different outcome from most listed securities.

Austria takes a different approach: cryptocurrency acquired after 28 February 2021 is taxed at a flat 27.5 percent under § 27b EStG 1988, regardless of holding period, so a family office with ties to both countries plans the two rules separately, since one does not apply to the other.

The fixed supply that makes bitcoin its own asset class also means no issuer can smooth out a demand shock, which is the direct source of its volatility. An IMF note found the correlation between bitcoin price volatility and S&P 500 volatility rose more than four-fold after the pandemic began, so a family office cannot rely on bitcoin to diversify a portfolio the way it might have a few years earlier.

ESMA warns that MiCA carries no investor compensation scheme for clients of crypto-asset service providers, so a family office has no equivalent of deposit insurance if a custodian cannot return the assets. That gap makes the custodian's own license and track record, not only its fee, the deciding factor.

Finance Loop is the meeting place for family offices, private bankers and their advisors working on digital assets across Germany, Austria and Switzerland, and connects the finance, IT and AI communities with events in Frankfurt, Munich, Berlin and Hamburg. The Bitcoin for Investors seminar from Finance Loop works through custody models, tax planning considerations and portfolio scenarios built for people managing private wealth across generations. Finance Loop is a founding member of the Bitcoin Bundesverband, the German Bitcoin Association.

Related pages cover bitcoin in Germany, describe family offices in Germany and explain MiCA in Germany.

Yes, if the bitcoin is held for more than one year before sale, under § 23 EStG, with no cap on the amount. A gain from a sale within one year is taxable, though gains under a combined 1,000 euros per calendar year stay exempt either way.

That depends on the family office's operational capacity, not on cost alone. Self-custody avoids custodian fees and counterparty risk but shifts key management and succession planning entirely onto the family; a licensed custodian such as a bank with a KWG and MiCA license removes that operational load in exchange for a fee and reliance on the custodian's own controls.

Bitcoin has behaved less predictably against other holdings than before 2020. The IMF found bitcoin's correlation with major stock indices was low before the pandemic but that its volatility correlation with the S&P 500 rose more than four-fold afterward, so a family office should not assume bitcoin will offset losses elsewhere in the portfolio during a broad market downturn.