Institutional investors and wealth managers set to invest in cryptoassets for the first time

A new survey of institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who collectively don’t currently have exposure to cryptocurrencies and digital assets, reveals that 62 per cent expect to invest in these for the first time within the next year.

However, Nickel Digital Asset Management (Nickel), a European investment manager dedicated to the digital assets market, which conducted the study, says in most cases this will just be professional investors ‘testing’ the market in terms of how it works, its infrastructure and liquidity.

The main reason given for investing in digital assets for the first time is the long-term capital growth prospects of cryptocurrencies and digital assets – the view cited by 47 per cent of respondents. This is followed by 44 per cent who said it is because more corporates and fund managers are investing in cryptocurrencies, which gives them greater confidence in the asset class, and 41 per cent who said it is because the regulatory environment is improving. One in three (34 per cent) said it is because it is a good hedge against inflation.

Henry Howell, Head of Business Development of Nickel Digital, says: “There is no doubt that the cryptoassets market is becoming more mainstream in the institutional and wealth management sectors.  This is being driven by several factors including strong market performance during the Covid crisis, more established investors and corporations endorsing the market, and the sector’s infrastructure and regulatory framework improving.

“As these trends continue to evolve, this will fuel further growth in the market from professional and sophisticated investors.” 

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