After sitting on the sidelines for more than a decade, a recent survey has revealed a new crop of institutional investors ready to go all out on cryptocurrencies. The research, according to Nickel Digital Asset Management (Nickel), a European investment manager dedicated to the digital assets market, draws participation from institutional investors and wealth managers from the US, UK, France, Germany, and the UAE. Each of those surveyed has no prior exposure to crypto.
The survey revealed that as many as 62% of the respondents confirmed they will be making their first investment in the cryptocurrency ecosystem within the coming year. Despite noting that a bulk of the investments will be an avenue for these classes of investors to test the waters in terms of how it works, its infrastructure, and liquidity.
“There is no doubt that the cryptoassets market is becoming more mainstream in the institutional and wealth management sectors. This is being driven by several factors including strong market performance during the Covid crisis, more established investors and corporations endorsing the market, and the sector’s infrastructure and regulatory framework improving,” said Henry Howell, Head of Business Development of Nickel Digital, “As these trends continue to evolve, this will fuel further growth in the market from professional and sophisticated investors.”
Factors Driving the Desires to Invest in Crypto
Per the survey report, the respondents have a variety of reasons for backing plans to inject liquidity into crypto with a massive 47% saying they hope to use the nascent asset class for their long-term capital growth prospects.
As much as 44% of those surveyed say they are confident to launch out into the space because other corporates and fund managers are investing in cryptocurrencies. An additional 41% noted that their confidence soared by virtue of the improving regulatory ecosystem in the industry, while 34% are willing to commit their funds noting the suitability of the asset as a hedge against inflation.
In the past year, Bitcoin (BTC), Ethereum (ETH), and other altcoins with unique fundamentals have been a delight of both retail and institutional investors who have taken positions through various options available. These options include through Grayscale trusts, approved crypto-backed Exchange Traded Funds (ETFs), and even direct purchase of digital currencies via spot exchanges.
The Nickel-sponsored survey re-emphasizes the positive outlook of the cryptocurrency ecosystem as it continues on its journey toward mainstream adoption.