A recent survey conducted by Sygnum, a Swiss cryptocurrency bank, indicates a significant shift in sentiment among institutional investors toward the cryptocurrency market. The annual Future Finance survey revealed that 57% of the 400 institutional investors polled across 27 countries intend to increase their allocations to crypto assets in the near future. Notably, 31% plan to ramp up their investments within the next quarter, while another 32% aim to do so within six months. Despite the overall positive trend, only a small fraction, 5%, expressed plans to decrease their crypto investments.
The survey highlights a developing risk appetite among institutions, with a majority leaning towards maintaining single-token investments, favored by 44% of respondents. This preference contrasts with 40% who prefer actively managed crypto exposure. Additionally, 36% of institutions hesitating to increase their positions seem to be waiting for more clarity in the market or optimal timing before making a commitment.
Emerging regulatory clarity has played a pivotal role in this evolving narrative. Historically, uncertain regulations and restrictive investment policies have hindered traditional investors’ interest in digital assets. However, as regulations become more explicit, institutional investors are increasingly expressing interest in cryptocurrencies, although concerns around market volatility, security, and custody continue to present challenges.
Importantly, the survey found that 81% of institutional investors are optimistic that improved information on cryptocurrencies could lead to increased allocations, indicating a shift in focus from regulatory hurdles to market-specific risks and technological evaluations. Investment preferences have notably shifted towards scalable layer-1 solutions, particularly influenced by established cryptocurrencies like Bitcoin and emerging technologies in Web3 infrastructure. However, interest in decentralized finance has diminished due to recent security breaches that have crippled confidence in that area of the market.
Overall, the preferences of institutional investors have shifted significantly from traditional assets like real estate to equities, corporate bonds, and mutual funds, underscoring a broader transition in the investment landscape.
