By Shelly Melancon (Switzerland)
Survey conducted has revealed that institutional investors will be buying cryptocurrency in the near future. This is important because many institutional investors have refrained from investing in the cryptocurrency market, citing various reasons for not investing. Now on the other hand, as much as 62% are looking to increase their revenue over the long term by investing in cryptocurrencies.
Global institutional investors, with no previous investment in cryptocurrency, were interviewed and 62% are looking to invest in cryptocurrency within the next 12 months for the very first time.
Result of Survey
The survey was conducted by European Investment Manager Nickel Digital Assets Management and was released today, September 28. Fifty wealth managers and fifty institutional investors across the world involving the United States of America, European countries like UK, France, and Germany and the gulf country United Arab Emirates. The survey was conducted by Nickel Digital Assets Management between May and June 2021 and the result was released today.
Various reasons were given by the respondents, and the number one reason stated for the interest in investing in cryptocurrency, is the potentially high return on investment. This was stated as the reason by 47% of respondents in the survey. 44% of respondents cited increasing confidence in cryptocurrency as an asset, and this is evident by the increasing number of fund managers who are investing in cryptocurrency. Improvement in cryptocurrency regulations was cited by 41% of respondents. About 34% consider cryptocurrency as a way to protect against inflation.
Henry Howell, head of business development of Nickel Digital Assets Management, sufficed that cryptocurrency market is getting accepted by mainstream financial sector and that this increasing acceptance has been influenced by several factors. Factors such as the impressive performance of Cryptocurrency during the Covid-19 pandemic, improved regulations and the increasing adoption by the corporate finance industry.
According to a survey released in July by Nickel Digital Assets Management, the factors affecting institutional adoption of cryptocurrency include skepticism about the security of cryptocurrency services and this is confounded by the volatility of cryptocurrency and poor regulations on ground. The impact of these barriers to adoption seems to be waning though, with the recent survey showing increasing willingness to invest in cryptocurrency.
Institutional Investors Buying The Dip
The result of this survey reaffirms the idea that cryptocurrency is becoming mainstream. CoinShares, a European digital asset manager, published a report that showed that Financial institutions are continually accumulating cryptocurrency holdings for consecutive weeks.
There has been a drop in the price of cryptocurrencies following the new regulation by the Central Bank of China which banned all cryptocurrency transactions and mining within the country. This regulation led to a drop in price of cryptocurrencies such as Bitcoin, Ethereum, Cardano, Litecoin etc. Despite this drop in cryptocurrency price, it appears institutional investors have been buying more cryptocurrencies. There has been inflows in cryptocurrency holdings of institutional investors for six consecutive weeks. They have been buying the dip in the price of cryptocurrencies. This shows the increasing involvement of institutional investors in the cryptocurrency market and the reduction in their aversion to invest in cryptocurrency.
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