INSTITUTIONAL investors with crypto holdings will boost investments in the year ahead as their short and long-term outlook on the sector turns more favourable.
This information is contained in new global research by London-based Nickel Digital Asset Management (Nickel), a regulated digital assets hedge fund manager founded by alumni of Bankers Trust, Goldman Sachs, and JPMorgan.
Nickel Digital commissioned the market research company Pureprofile to interview 200 institutional investors and wealth managers.
Nickel Digital CEO and founding partner Anatoly Crachilov said: “The robust performance of the sector, coupled with the Securities and Exchange Commission’s approval of spot Bitcoin ETFs, was anticipated to augment optimism within the sector, but the number of respondents intending to elevate their investments in crypto is still remarkable.
“It is a contrast to last year, when there was still nervousness among institutions about committing to the market, but that appears to have decisively changed with sovereign wealth funds, pension funds, family offices, wealth managers, and hedge funds all expected to increase investment over the short and medium term.”
According to the research, three out of four (74%) of institutional investors and wealth managers with digital asset exposure plan to increase their allocations this year, the study with professional investors in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $816 billion in assets found. Within these, as much as 13% plan to increase investment “dramatically”.
“That is a turnaround from the previous 12 months when just over half (52%) increased their level of investment in the sector, while 38% reduced or completely sold out their investments in the market,” the study found.
According to the survey, the change can be explained by the strong performance of the digital asset sector in the past year, with leading coins up strongly.
“Around 87% questioned said current investment opportunities in the sector look attractive, with 20% saying they were very attractive.
“That outlook becomes even more positive in the long term, with 92% rating investment opportunities in the sector as attractive over five years, including 41% rating them as very attractive.
“Sovereign wealth funds and pension funds were seen as the most likely to increase investment, but all sectors were rated as likely to increase investment levels,” it said.
* Maleke is the Personal Finance editor.
PERSONAL FINANCE