- The survey revealed that institutional investors are taking long-term positions in crypto.
- 83% of these investors are bullish on the market (for now), while 71% see asset valuation increasing over the long term
- Crypto winter does not deter the majority of these investors.
Many would have thought the ongoing crypto winter would deter investors from investing in the market. However, various statistics, surveys, and indices showed that investors would increase their crypto allocation in the coming years.
The report shows that crypto assets such as Bitcoin (BTC) and Ethereum (ETH) have remained at an all-time low —since the bear market began a year ago. Amidst this bear market, institutional investors have increased and are planning to increase their positions.
On this premise, the Institutional Investor Custom Research Lab was conducted between September and October. The survey report is titled “Institutional Investors Take Long-Term View On Digital Assets.”
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It highlighted that most big-money investors had adopted a long-term vision. The vision of these investors is that emerging asset classes can disrupt the traditional financial services industry.
Institutional Investors To Increase Crypto Allocation
The survey was conducted for 140 institutional crypto investors in the United States representing $ 2.6 trillion of assets under management. According to the survey, 72% of the respondents strongly believe in the longevity of crypto.
Similarly, 83% of these investors expect prices of crypto assets to trade range-bound or trend lower in 2023— while 71% of the respondents expect asset variations to increase over the long term.
Experts say a huge percentage of investors expect the market to trend lower by next year due to the recent meltdown of the FTX exchange. The fall of several blockchain protocols like Terra, Arrows Capital, and Celsius has hurt investor sentiment.
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Similarly, there has been a series of global monetary tightening policies and regulations. These policies and regulations lead to economic uncertainties and have posed difficulties to industry players. With these difficulties, institutional investors are pulling back their investments. However, this feeling is short-term, as the survey shows many expect asset valuations to increase over the long term.
Furthermore, the survey seeks to identify why these institutional investors say they will increase their crypto allocation. According to the survey, the main reasons include greater yield opportunities, exposure to blockchain technology, — and the potential long-term appreciation of the crypto market.
Significantly, 64% of the respondents want more robust and clear regulations. They said the crypto space lacks regulatory clarity, with no central regulatory regime overseeing the industry.
Since the report was released, several industry players and enthusiasts of the crypto ecosystem have reacted. One such reaction is from Brett Tejpaul, a Vice President at Coinbase global. He said “we expect the institutional investors to continue to express interest and allocate— even though the short-term cycles— as challenging as they are.”