In 2023, close to 40% of institutional investors had incorporated crypto assets into their portfolios, marking a notable surge from the 31% reported in 2021.
A recent survey jointly conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies indicates a substantial uptick in institutional investors’ engagement with cryptocurrencies.
According to the survey findings, one-third of participants disclosed that they had allocated at least 10% of their portfolio to crypto assets, contrasting with just a fifth of respondents doing so two years prior.
Institutional Investors Enter Crypto Amid Maturing Market
The survey also delved into the factors driving institutional investors’ burgeoning interest in cryptocurrencies.
A significant majority of respondents, 67%, pointed to the maturation of the market and custody infrastructure as a key factor, marking a substantial rise from the 14% reported in 2021.
Additionally, 58% of respondents cited the robust market performance of cryptocurrencies as a driving force behind their investment decisions.
The recent years have seen remarkable market performances, particularly for Bitcoin and Ethereum.
Bitcoin, holding the title of the world’s largest cryptocurrency by market capitalization, witnessed a staggering 150% surge in 2023 and has surged nearly 60% year-to-date.
Similarly, Ethereum, the second-largest cryptocurrency, experienced an approximate 60% increase in value in 2024.
The approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January of this year has played a pivotal role in enhancing institutional investors’ access to the crypto asset class.
Following years of unsuccessful applications, the SEC’s decision has simplified the inclusion of cryptocurrencies in institutional portfolios.
Another recent survey conducted by the Digital Assets Council of Financial Professionals indicates a significant uptick in the number of financial advisers considering recommending crypto-related opportunities to their clients.
According to the survey, 35% of respondents plan to advise their clients to invest in the digital assets space, compared to 21% at the conclusion of the previous year.
The growing interest in cryptocurrencies has prompted major sell-side firms, such as JPMorgan and AllianceBernstein, to broaden their coverage of digital assets.
This expanded research coverage has fostered more sophisticated and nuanced discussions between investor relations (IR) professionals and institutional investors.
IR teams have noticed a discernible shift in investor comprehension and awareness of cryptocurrencies, with conversations now delving into more advanced topics compared to previous years.
Crypto Sees Increase in Interest in Hong Kong
In Hong Kong, the growing interest in cryptocurrencies is evident, driven by regulatory clarity and recent approvals of Bitcoin and Ethereum spot ETFs. This surge in attention spans both institutional and retail investors.
OSL Group, a digital assets company listed in Hong Kong, has witnessed a notable increase in investor interest. Consequently, their investor relations strategy has become more proactive.
Reports indicate that Hong Kong has launched its inaugural batch of ETFs focused on cryptocurrencies, presenting potential competition for the popular Bitcoin products in the United States.
Harvest Global Investments Ltd., the local unit of China Asset Management, alongside a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co., debuted Bitcoin and Ether ETFs in the city on Tuesday.
