A new survey commissioned by crypto asset insurance company, Evertas, a cryptocurrency insurance firm, found that institutional investors plan to significantly increase their stakes in Bitcoin (BTC) and other digital assets in the future.
After surveying 50 institutional investors that collectively manage over $78 billion in assets in the United States and United Kingdom, a standout response was that 26% of participants believe that pension funds, insurers, family offices and sovereign wealth funds will raise their stakes in cryptocurrency “drastically”.
64% of participants believe the increase in interaction will be moderate, but the group also expects that hedge funds will be more actively engaged in crypto. 32% of respondents believe hedge funds will increase their crypto holdings drastically.
Institutions have a love-hate relationship with crypto
Institutional investors seem keen to invest in Bitcoin and other cryptocurrencies partially because they believe regulations for the crypto market will improve and become clearer in the future.
Others believe that the market will eventually become bigger, providing better liquidity, a feature that most institutional investors require. As the market improves, many also believe there will be a wider range of investment vehicles for institutions to choose from.
The survey also found that there are still many bumps in the road to crypto institutionalization. More than half of the participants said that they are concerned about the lack of insurance for digital assets, while others are worried about the quality of custodial services, trading desks, reporting facilities and the procedures of other companies working in the sector.
J. Gdanski, CEO and Founder of Evertas, told Cointelegraph:
“Our research shows that institutional investors are enthusiastic about increasing their exposure to cryptocurrencies and crypto assets in general, but there are clearly many issues regarding the infrastructure that supports these markets that still concerns them. These clearly need to be addressed if the full potential of investment from institutional investors in crypto assets is to be realised.”
While the outlook on regulating Bitcoin and other established crypto assets may be positive among institutional players, the same may not be true for other sectors of the cryptosphere.
Institutions ignore Bitcoin’s volatility by taking a bird’s-eye view
While the price of Bitcoin has failed to live up to the post-halving rally that many investors anticipated, institutions remain interested in Bitcoin. Recently, the trading volume for Bakkt’s Bitcoin futures reached a new record of more than $200 million worth of contracts exchanged, suggesting that institutions are still accumulating BTC.
Furthermore, mainstream fund managers are beginning to enter the market, a sign which the majority of the Evertas survey participants believe is a major factor in the institutional adoption of crypto.
Just last week MicroStrategy CEO, Michael Saylor, followed the footsteps of veteran investor, Paul Tudor Jones by purchasing 21,454 BTC. Earlier in the year Jones revealed his stake in Bitcoin, describing the assets as the “fastest horse” with the best odds performance wise.
As investors’ interest in crypto-assets grows and the regulatory landscape for these assets becomes more clear, it's expected that the wave of institutions flocking to Bitcoin will continue to increase.