Originally published on: November 14, 2024
The interest in Bitcoin and other cryptocurrencies among institutional investors is on the rise, signaling a long-term commitment to the digital asset market.
A recent survey conducted by Sygnum, a Swiss crypto bank, revealed a growing appetite for crypto assets among institutional investors. The report, released on Nov. 14 and shared with Cointelegraph, indicated a positive market sentiment and shifting interests towards cryptocurrencies.
Martin Burgherr, Chief Clients Officer at Sygnum Bank, attributed this positive sentiment to clearer regulations on a global scale, which are encouraging institutional investors to explore the crypto space with more confidence.
The survey, which gathered responses from 400 institutional investors across 27 countries, showed that 57% of respondents are planning to increase their crypto allocations. Of these, 31% aim to do so in the next quarter, while 32% expect to make changes within six months.
Interestingly, only 5% of respondents plan to decrease their crypto holdings, indicating a generally high-risk appetite among institutional investors. Additionally, 44% of those looking to increase their crypto exposure prefer single-token investments, while 40% opt for actively managed exposure as their preferred investment strategy.
While 36% of institutions are holding onto their current positions, they may be waiting for further market confirmation or optimal entry timing before increasing their crypto allocations.
Despite the positive outlook, challenges such as high market volatility, security, and custody concerns remain primary obstacles for institutions entering the crypto space. However, as regulatory clarity improves, institutional investors are focusing more on market-specific risks, strategic planning, and technology deep dives.
According to the survey, better information on crypto assets is crucial for 81% of institutional investors to increase their investments, shifting their focus from regulatory concerns to market dynamics, strategic planning, and technology advancements.
In terms of investment preferences, institutional investors are leaning towards scalable layer-1 solutions influenced by cryptocurrencies like Bitcoin and Solana, as well as stablecoins. Beyond crypto assets, there is also a growing interest in Web3 infrastructure, particularly in Decentralised Physical Infrastructure (DePIN) and artificial intelligence.
Interestingly, while interest in decentralized finance has declined due to security concerns stemming from high-volume hacks, institutional investors are exploring equity, corporate bonds, and mutual funds as alternative investment options.
The evolving landscape of institutional investments in the crypto market highlights a shifting paradigm towards long-term commitments and strategic diversification. This trend is driven by increasing market confidence, regulatory clarity, and a deeper understanding of digital assets among institutional players. Subscribe to our newsletter to stay updated on the latest market insights and investment opportunities.
