To gain a deeper understanding of how professional investors feel about digital assets, Cointelegraph Consulting has published a 70+ page research report written by eight authors and supported by SIX Digital Exchange, BlockFi, Bitmain, Blocksize Capital, and Nexo. The Discovering Institutional Demand for Digital Assets report highlights which coins wealthy investors already own and which ones they plan to buy in the coming months. The report also covers the most popular regulated funds and structured products that are designed for investors from the traditional finance realm.
The total assets under management of the 55 portfolio allocators that participated in the survey was over €719 billion, which is almost double the entire market capitalization of the digital asset market. Out of those professional investors, 36% already had blockchain-inspired assets in their portfolio either through direct investment in cryptocurrencies, stablecoins, and security tokens or via funds, structured products, or futures.
Out of the remaining 64% that have not yet invested, 39.29% plan to invest. This results in 36% + 25.15% = 61.15% of professional investors in the survey either already owning digital assets or planning to buy in the future.
Download the full report here, complete with charts and infographics.
The majority of investors with exposure to cryptographic assets were primarily interested in Bitcoin (BTC) and Ethereum (ETH). Around 88% and 75% of respondents exposed to cryptocurrencies have invested in these cryptocurrencies, respectively. However, institutional investors appear to be increasingly interested in security tokens. Out of the 39.29% of investors that plan to invest in the future, security tokens were more popular than Ethereum and other alternative coins.
Some investors hold cryptographic assets for speculation rather than for use as a medium of exchange. They hope to “front-run” Wall Street by buying in before bigger pockets enter the market. Putting the fear of missing out aside, there are genuine reasons to be excited about institutional investors joining the space.
The sheer size of the wealth managed by professional investors like pension funds, university endowments, and insurance companies is enough to have a dramatic impact on the entire digital asset industry if they enter the market. For years, there have been rumors that institutional investors were starting to buy cryptocurrencies, and now, the most recent academic survey, as well as news of Microstrategy, Stone Ridge and Square entering crypto, provide evidence to support this.
The survey was conducted during June through September 2020 by Professor Dr. Philipp Sandner from the Frankfurt School of Finance & Management’s Blockchain Center, Professor Dr. Alfred Taudes from the Vienna University of Economics and Business’ Austrian Blockchain Center, and Cointelegraph’s director of research, Demelza Hays. The report is co-published by Cointelegraph Consulting and Crypto Research Report.
Cointelegraph Consulting offers bespoke research on digital assets and distributed ledger technology. Our services range from educational seminars, in-depth written reports and consulting on enterprise blockchain implementation strategies. Crypto Research Report produces free quarterly reports in German and English and premium buy-side research for governments, banks, and family offices on the topics of distributed ledger technology and asset management of cryptocurrencies.