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82% of institutional investors plan to increase their exposure to crypto-assets

Photo of: Joseph Stone
by Joseph Stone

Institutional investors are not giving up yet on crypto-assets following the recent crash. In fact, 82% of them are planning to buy more crypto-currencies.

Since May, funds committed to Bitcoin investment products have shown a net decline of over $300 million. Last week, however, was characterized by a stabilization. On the other hand, the trend was the opposite for Ethereum.

Does this mean that institutions are now turning away from crypto-assets? Not necessarily. Rather, investors would tend to diversify their portfolios to mitigate risk. 82% of institutions are inclined to buy more diversed crypto-currencies.

“Multi-digital asset investment products continued to buck the negative trend with inflows of US$6 million last week, suggesting that investors continue to favor digital assets but are eager to diversify,” CoinShares observed.

This investment strategy may explain the persistent interest expressed by institutional investors in crypto assets. According to a survey of 100 investors by the crypto fund Nickel Digital Asset Management, the momentum remains strong.

Thus, 80% of hedge fund executives, wealth managers, and institutional investors say they have already invested in digital assets. But above all, a significant portion of them plan to increase their exposure over the next few years.

Indeed, 82% of respondents want to follow this trajectory between 2021 and 2023, and this while the study was conducted from May to June, i.e. in the middle of the crypto crash. The discouragement following the collapse of prices is therefore not current.

The trend is even the opposite for 40% of institutional investors surveyed in the United States, the United Kingdom, France, Germany, and the Arab Emirates. The latter plan to increase their holdings “considerably”.

In comparison, only 7% of investors expressed the intention to reduce their exposure and only 1% to liquidate their entire holdings. So is the craze for crypto-assets the rule?

The results of the study are to be weighted. Nickel Digital Asset Management indeed specifies that institutions currently have very little exposure to these assets. Many of them are still in the experimentation phase.

By 2023, these investors could begin a second phase. And the potential long-term gains, despite a fall in prices, are the primary investment lever. Despite a severe correction, the main crypto-assets remain on an upward trend over the past year. BTC is up 18% and Ether is up over 200%.