More and more institutional investors want to enter the cryptocurrency market. This is evident from a research from European asset manager Nickel Digital Asset Management, published on September 29.
A whopping 62% of international institutional investors with 0% exposure to crypto like bitcoin (BTC) or ethereum (ETH) expect to make their first investment in crypto within the next year.
Nickel surveyed 50 asset managers and 50 institutional investors from the United States, United Kingdom, Germany, France and United Arab Emirates in May and June.
According to the research, the biggest reason for institutional investors to invest in crypto is its long-term profit potential. 47% of respondents named this as the main reason. In addition, 44% want to invest in crypto due to the growing confidence in crypto as an asset class as more and more companies and funds invest.
Subsequently, 41% consider investing in crypto for the first time because they now consider the regulation situation better and 34% see crypto as a good hedge, or safe haven, to hedge against inflation of fiat currency.
Henry Howell, head of business development at Nickel, says the growing adoption of crypto among institutional investors is driven by the strong performance during the coronavirus pandemic in addition to the factors mentioned above.
“There is no doubt that the cryptocurrencies market is becoming more mainstream in the institutional and asset management sectors. As these trends continue to evolve, this will drive further growth in the professional and sophisticated investor market.”
Two weeks ago, Nickel published a research among institutional investors who already have exposure to bitcoin. Of this group, 32% plan to altcoin as ether for the first time in the next 12 months. Anatoly Crachilov, CEO of Nickel, says that decentralized finance (DeFi) is especially attractive among institutional investors:
“Many DeFi protocols have seen their market capitalization rise dramatically over the past year, with valuations rising faster than bitcoin’s. These assets are case-oriented and rely on greater programmability than bitcoin, which is reflected in their price dynamics. It is therefore no surprise that forward-looking institutional investors and asset managers are paying increasing attention to this emerging part of the crypto market.”