© Reuters. Crypto Winter Has Institutional Investors Stacking Sats: Survey
- Institutional investors are taking a long-term stance on crypto because they believe it is here to stay.
- Some investors are taking advantage of the current crypto winter to educate themselves and lay the groundwork for the future.
- The case for investing in this new asset continues to grow.
- Regulatory uncertainty is a major concern for most institutional investors.
A survey of institutional investors found that throughout the crypto winter, these investors have beefed up their allocations. Many investors saw the crypto winter as a time to get into crypto to learn the technology and grow for the future.
The Coinbase (NASDAQ:) sponsored research was conducted between September 21 and October 27 and made public on November 22. It shows that 62% of institutional investors holding cryptocurrency holdings have increased their allocations over the past year.
The study revealed that only 12% of institutional investors have reduced their exposure to cryptocurrencies. This means that, despite recent price declines, the majority of institutional investors can still be optimistic about long-term digital assets.
Most Institutional Investors Prefer to Buy and HODL
More than half of the investors who took part in the survey indicated that they use or expect to adopt a buy and hold strategy for cryptocurrencies, in the hope that cryptocurrency prices will remain stable and limited during the year. the next 12 months.
Most investors believe that cryptocurrency will still be important in the future and view it from a long-term perspective. 72% of institutional investors believe digital assets are here to stay, indicating that institutional adoption has reached a new level of maturity and is now firmly established, according to the survey.
Additionally, 58% of investors said they plan to increase their portfolio allocation to cryptocurrencies over the next three years. Nearly half “strongly agree” that cryptocurrency valuations will improve over the long term.
Investors’ motivations for allocating capital to this asset class are changing, according to the survey. Reasons given for investing include the desire to increase returns, diversify portfolios, support new technologies and diversify risk. This is different from previous research, which focused more on the asset’s ability to hedge against inflation and had a low correlation to other asset classes.
on the reverse
- Consistent with previous reports, regulatory uncertainty was again cited as a top issue for investors when deciding whether or not to invest money in cryptocurrency, with 64% of those planning to invest l next year citing such concerns.
- The survey was conducted prior to the collapse of FTX, which according to CoinShares caused a record increase in short-term investment products.
- Currently, total assets under management for institutional cryptocurrency investors stand at $22 billion, the lowest level in two years.
Why You Should Care
The Coinbase study used a nationally representative sample of 140 US-based institutional investors with a total of approximately $2.6 trillion in assets under control. The survey was conducted by B2B publication Institutional Investor’s Custom Research Lab.
The case for institutions that get involved in cryptocurrencies is that large, well-thought-out investments help calm this market, which is highly volatile. It is believed that having significant investors in this market would make it an attractive choice for investors, which in turn would attract a variety of new investors, ultimately resulting in more stability.
Learn more about institutional investing in cryptocurrencies:
Institutional Investors Ditch Digital Assets After FTX Crash
Institutions Transferring (BTC) to Cold Wallets: Will Prices Rise?