Institutional Investors Forecast ‘Strong Year’ for Bitcoin 65% Expect BTC to Hit $100K, Survey Shows Markets and Prices Bitcoin News

The crypto sector has gathered a lot of interest from consumers and institutional investors since the pandemic. PWC’s 4th Annual Global Crypto Hedge Fund Report 2022 reported that the assets under management of crypto hedge funds surveyed was $4.1bn in 2021, 8% higher than the previous year. Though hedge funds are taking exposure to the crypto market, they are limiting their exposure, as approximately 57% of hedge funds investing in crypto have less than 1% of total AUM invested in the sector.

Out of step with its share of the overall crypto markets, Ethereum institutional investments saw minor inflows on the week. BTCE is supported by a network of world class Authorised Participants and Market Makers, experienced in cryptocurrency markets as well as the ETP markets. The APs ensure on-exchange liquidity and tight spreads, enabling traders to purchase in all sizes without having to worry about market impact. The study also asked participants whether digital assets should have a place in investment portfolios or not. As you can see above, 58% of the institutional investors that took the survey this year owned crypto at the time of the study.

The global crypto market cap started the year at $2.3 trillion and ended it at $829 million, according to CoinGecko. Three Arrows Capital, a crypto hedge fund, imploded and could not repay billions in loans. The size of potential opportunities in any pool of liquidity can be measured by how often it trades and how high its volatility is. As shown above, the crypto ecosystem has quickly emerged as a sizable pool of liquidity from this perspective, so we are seeing players step in to trade it. Exploring the different ways institutions are gaining exposure to cryptocurrencies and how these exposures are likely to play out over time.

Institutional Investors Remain Hopeful About Crypto Despite Weak Market, Survey Reveals

Recession risk (30%) and inflation (26%) were identified as the top potential developments that could impact markets. Institutional investors, banking giants and multinational corporations have adopted Bitcoin in big ways, which means the landscape has been fundamentally altered. And DeFi, spurring needed regulation and weeding out unsustainable enterprises, according to 451 Research analyst Alex Johnston, it may also drive investors away from blockchain-based systems. Crypto fund investments in 2022 were the lowest they’ve been since 2018, according to a new CoinShares report. The views expressed herein are solely those of Bridgewater as of the date of this report and are subject to change without notice.

For retail and institutions alike, whether from the US or global, it has never been easier to determine how to invest in crypto. The past 12 months have seen a major shift in the way institutions look at digital assets. The economic effects of the covid-19 lockdowns in the spring of 2020 caused central banks to engage in economic stimulus and lower interest rates to zero, and the narrative surrounding Bitcoin became that of “digital gold” — a good hedge against inflation. This was further strengthened by Bitcoin’s halving in May 2020, whereby the supply of newly “mined” Bitcoin was cut in half, making it less inflationary than gold. The price of any Shares or the value of an investment in ETPs may go up or down and an investor may not get back the amount invested.

HSBC And Nationwide Banks Set Ban On Crypto Purchases In The UK

By downloading this Whitepaper, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services. JP Morgan said its customers could consider putting 1% of their portfolio in the cryptocurrency. Bitcoin is down approximately 63% in value since this time last year and the industry is on fire after the catastrophic bankruptcy of FTX, which came just six months after the $25 billion collapse of one of DeFi’s most popular projects, Terra. The above is for general info purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax or other advice specific to your particular situation.

A recent survey from Fidelity shows 58% of institutional investors already own cryptocurrency. The cryptocurrency sector is finally getting attention from financial institutions who are looking to capitalise on its growth. Though their investments are currently limited, they are likely to grow their position, especially when governments finally introduce regulatory frameworks. Since the pandemic, financial institutions have increased their exposure to the cryptocurrency sector so they can provide crypto investment opportunities to their clients. With frostier attitudes toward the industry, crypto’s own suite of institutional investors is struggling to stay alive. Lenders including BlockFi, CoinDesk sister company Genesis and SALT have paused withdrawals.

Hedge funds and crypto-only funds pursue diverse strategies

Dealmaking value and volume trended in only one direction last year, expanding in all four quarters of 2021. The https://www.beaxy.com/ is to bring together Institutional investors, renewable energy producers, climate scientists, NGOs, and the bitcoin community into an international sustainability protocol, designed to address one of the most significant issues of our time. We believe that Bitcoin powered by clean energy can be one of the most sustainable asset classes in the world. Through the SBP protocol, we will create a market-based solution that can help accelerate the Bitcoin network’s transition to renewable energy. The survey, commissioned by Nickel and conducted by market research company Pureprofile this month, interviewed 200 institutional investors and wealth managers across the U.S., U.K., Germany, Singapore, Switzerland, UAE, and Brazil. A new survey shows that institutional investors expect “a strong year ahead for bitcoin” and are confident about the cryptocurrency’s long-term valuation.

• Notably, 86% of these people have already invested in cryptocurrencies, and 64% are planning to.
• And surprisingly, these regulations could address many of the biggest concerns of institutional investors.
• When we look at what is holding institutions back, some of the barriers cited in surveys are about the nature of the asset class (e.g., it is volatile, hard to value, etc.), and others are more structural (e.g., custody issues and regulatory uncertainty).
• The survey results show that differential performance is the top reason investors want to invest in cryptocurrencies.
• Most investors (59%) currently employ or intend to operate a buy-and-hold strategy.

These include exceptionally high volatility, regulatory uncertainty, and rapidly evolving technology and competitors . The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period.

Let’s take a look at the bitcoin institutional investors winter, why institutional investors are ignoring the crisis, and what’s next for the industry. This category also includes early investors or miners of Bitcoin and other cryptocurrencies who have custodied their own stockpiles for years, but recently watched the value of their assets grow to such a degree that they seek professional custody services. This report focuses on the crypto institutional adoption of crypto from the perspective of Finoa as the leading crypto custodian in Europe. It provides a general overview of the news-worthy institutional investments over the past year and a categorization of use cases of such investments as we observe them.

Institutional investors continue to see the long-term potential of crypto and have been loading their bags throughout the year, according to a survey. Not all of those products are designed for investors with an optimistic stance on crypto. After FTX filed for bankruptcy on November 11, BlockFi, a crypto exchange, froze customer withdrawals following the collapse of FTX and filed for bankruptcy on November 28.

Coinbase’s institutional survey suggests that many funds have created a separate category for crypto or are classifying crypto as part of an innovation or emerging technology allocation. As a result, these funds have been buying crypto assets to improve the funded status and reach their target asset allocations in these categories. However, there’s evidence that institutional investors have struck a different tone.

Fidelity hired a firm to survey 1,052 global institutional investors during the first six months of 2022, and 81% of the respondents indicated they saw some role for digital assets in investment portfolios. Fidelity’s Digital Assets Survey found that 74% of institutional investors plan to buy or invest in digital assets in the future, up 3% from 71% in 2021. Moreover, high-net-worth investors reported a substantial increase in future preference to buy digital assets, increasing from 31% to 74% year over year.

As shown below, estimates of bitcoin institutional investors AUM remain relatively modest, at about ~$20 billion. Many of the largest crypto-native active managers have both hedge fund and VC arms, which can often entail both overlaps and some synergies but makes it difficult to cleanly attribute AUM. Some of the largest crypto funds are also now effectively “prop shops” that do not accept outside capital. Perhaps the largest development yet to take shape in the digital asset landscape is “tokenization”, whereby existing financial assets are put onto the blockchain in the form of “security tokens”. Tokenization is set to create massive change in the way we account for and trade assets, both digital and physical, as ownership of digital assets can be more easily transferred, fractionalized into smaller shares, and traded with more liquidity.

For example, Bitstamp, a crypto exchange, told CoinTelegraph that institutional registrations on its platform were up 57% in November compared to October. And at least three recent surveys found similar sentiments among institutional investors. The next major step forward in the crypto ETP landscape would be the long-waited approval of a Bitcoin ETF by the United States SEC. The Winklevoss twins filed their first application for such an ETF in 2013, which was rejected by the SEC in 2017.

But it also recognizes that volatility is not all bad if it is skewed to the upside. Currently, digital assets suffer from a lack of regulatory clarity, with nearly daily confusion about whether they are securities, commodities, currency or property. In essence, the future Web3 resides in cryptographic tokens, secured in decentralized blockchains that are separate and distinct from the operating models created by the big tech giants.

Tokenization of real estate assets, for example, would do away with listing agents, real estate attorneys, title companies, and notary signing agents, as smart contracts and blockchain ledgers would create immutable records of ownership and transactions. Research from the World Economic Forum , Deloitte, and McKinsey project that up to 10% of the global Gross Domestic Product will be stored and transacted with the help of blockchain technology by 2025–27. A 2018 study from Finoa estimated a tokenized asset market of ~$24trn by 2027. In the eyes of Edmond Goh, head of trading for crypto market maker B2C2, institutional investors (e.g., hedge funds) are becoming more active with crypto trading than individual retail investors, as reported by the Journal. He told the newspaper that last year his firm saw over 45% of client ETC trading flows originate from retail versus 34% year-to-date. At the tip of the spear, a growing and meaningful share of less-constrained institutional investors, such as family offices, have already begun to allocate a small portion of their assets to outright crypto exposure.

Although these remain small markets relative to the most liquid markets in the world, we believe crypto markets are now large enough to allow for positions in sizes relevant to institutional investors. By comparison, just 34% of Coinbase’s respondents said they were investing in crypto assets as a buy-and-hold opportunity. In fact, 56% thought that investment-grade corporate bonds would offer better returns than digital assets – which tied with real estate at 35%. Of course, crypto hedge funds were an exception, seeing more opportunity for alpha.

• But it’s still down some 65% from its November 2021 all-time high given the downfall of the Terra (LUNC-USD) blockchain and subsequent high-profile implosions, including crypto lender Celsius Network (CEL-USD) and crypto exchange FTX (FTT-USD).
• Starling Bank, situated in the UK, recentlytightenedits regulations on cryptocurrency transfers while stopping all incoming and outgoing payments from exchanges.
• Bitcoins and ethers are fungible tokens of exchange, while non-fungibles tokens, or NFTs, give users the ability to own objects, which can be art, photos, identities, land, mortgages, leases, etc.
• Finoa offers intuitive access to the ecosystem, bringing down the technical barrier to entry and offering the opportunity to custody with a regulated crypto custodian.
• It utilizes peer-to-peer interactions, essentially minimizing the need of centralized platforms, intermediaries and trust authorities.

In addition, 58% plan to increase the percentage of assets they invest in crypto. The objective of SBP is to bring together institutional investors, renewable energy producers, climate scientists, NGOs, and the bitcoin community into an international sustainability protocol, designed to address one of the most important issues of our time. We believe that Bitcoin powered by clean energy can be one of our planet’s most sustainable asset. Through the SBP protocol, we are creating a market-based solution that can help accelerate the Bitcoin network’s transition to verified clean energy. The value of digital assets locked in DeFi has exploded over the past 12 months , but regulations still lag behind and prevent many institutions from entering in full force. Centralized lending companies have successfully opened up a lending market for crypto and work with many large institutions, but the world of DeFi still remains largely retail-dominated due to regulatory and technical complexity and risk.

Many Bitcoin ETF applications have been made since then, only to receive similar rejections. (Currently, there are 8 applications with the SEC for a Bitcoin ETF.) Grayscale has also stated its desire to convert its products from trusts into ETFs, which would then become redeemable for the underlying assets and trade at a fairer price. Institutional investors wishing to purchase crypto via exchange-traded products will have to wait for a US ETF and make do with existing ETPs. While this report focuses on institutional investment, it is worth mentioning that opportunities for retail investors to purchase crypto now include Paypal, Venmo, CashApp, Revolut, Trade Republic, Robinhood, eToro, and more.