Survey: 4 of 5 institutional investors to increase exposure to crypto

By: Daniela Kirova
Daniela Kirova
Daniela was born in Bulgaria, grew up in Chicago, and then moved to Michigan to attend the University of… read more.
on Jul 6, 2021
  • 40 per cent report plans to increase their holdings markedly
  • 38 per cent have become more confident and comfortable holding crypto assets thanks to the exposure
  • More established investors and corporations are now endorsing the digital asset market

More than 80% of institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who are currently exposed to digital assets, including cryptocurrencies, anticipate increasing their exposure through 2023, a survey cited by Institutional Asset Manager reveals. In what could be considered a bullish sign for the asset class, 40% of those surveyed plan on dramatically increasing their holdings while just 1% of people plan on selling all of the digital assets they owned.

Big investment plans or just testing the market?

According to Nickel Digital Asset Management, a leading digital asset investment manager who conducted the survey, most institutional investors with holdings in crypto are merely testing the market, which is why their exposure levels are so low. Almost 60% of respondents said cryptos and digital assets would continue to grow over the long term, which is why they want to invest bigger amounts in them.

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Just under 38% of respondents said they had become more confident and comfortable holding crypto assets thanks to the exposure. Roughly the same percent said they wanted to increase their exposure because more fund managers and companies were investing in the asset class. Some cited improving regulations as the reason to increase their holdings.

‘Staggering’ amount of bitcoin is being held

Co-founder and CEO of Nickel Digital Asset Management Anatoly Crachilov commented on the study and noted:

“Our analysis  at the start of June this year revealed that 19 listed companies with a market cap of over USD 1 trillion had around USD 6.5 billion invested in bitcoin (BTC/USD), having originally spent USD 4.3 billion buying the cryptocurrency. We also found a staggering USD 43.2 billion worth of bitcoin is held through various bitcoin closed-ended trusts and exchange traded products. Many of those professional investors with holdings in cryptoassets are looking to increase their exposure.”

He cited factors such as more established investors and corporations endorsing the market, strong market performance during the Covid-19 crisis, and the sector’s infrastructure and regulatory framework improving as the most important ones explaining the tendency, adding that these trends would remain in effect over the long term.

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