A growing set of institutional investors and wealth managers, who never had exposure to cryptos and digital assets, are looking to make their first bet within the coming year as Bitcoin, Ethereum, and others continue to gain mainstream attention. According to a survey of wealth managers and institutional investors from the US, UK, France, Germany, and the UAE by the European investment manager Nickel Digital Asset Management, according to the portal Institutional Asset Manager, the investment made in most cases will just be a ‘testing’ of the market in terms of how it works, its infrastructure and liquidity.
“Corporates have already been adding cryptos. For example, MicroStrategy has been very successful with cryptos. A lot of international investors are investing through Grayscale Bitcoin Trust. So there is a corporate vibe that Bitcoin and Ethereum have already proven to be a very good asset against inflation. In case of a financial crisis in the future due to instances such as the Evergrande issue, investors would want to look at something apart from gold to divert their investment from the capital market that could be a reliable hedge. Bitcoin comes handy in that scenario,” Hitesh Malviya, Founder, itsblockchain.com told Financial Express Online.
47 per cent respondents in the survey cited long-term capital growth prospects of cryptocurrencies and digital assets as the top reason for putting money into digital assets. On the other hand, more corporates and fund managers investing in cryptocurrencies was another reason by 44 per cent respondents for investing as it gives them more confidence in digital assets. Improvement in the regulatory environment was the reason for 41 per cent respondents while 34 per cent said it was due to a good hedge against inflation, the portal with survey results noted.
“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,” said Henry Howell, Head of Business Development of Nickel Digital on the survey results.
Business intelligence company MicroStrategy is the world’s largest public company in terms of its bitcoin holding. Recently this month, it had announced purchase of additional 5,050 bitcoins for $242.9 million that took its total bitcoin count to 114,042 acquired for $3.16 billion. According to Buy Bitcoin Worldwide, Tesla, Galaxy Holdings, Voyager Digital, Square, were other leading public bitcoin holders.
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