The institutions are here, and they are buying the dip. Cointelegraph’s second annual survey found that 62% of professional investors currently hold digital assets (43%) or plan to buy them in the future (19%).
Blackrock, the largest asset manager in the world with $10 trillion in assets, just announced its second blockchain ETF, one month after the debut of its first one. Goldman Sachs took on principal risk in a crypto OTC trade for the first time with Galaxy Digital. Goldman Sachs now has a part of its website dedicated to the investment case for cryptocurrencies and the metaverse. The largest hedge fund in the world with $140 billion in assets under management, Bridgewater Associates, announced they were backing a Bitcoin fund. Fidelity is weighing a plan to allow its brokerage customers—some 34.4 million individual investors—to trade the world’s largest cryptocurrency. Citadel, Brevan Howard, Investment Bank Cowen—soon, the list of institutional investors in crypto will be longer than the list not involved. Not only will these institutions bring liquidity to the cryptocurrency space, but they also hold significant power in local politics and governments. Finance, insurance, and real estate lobbyist groups in the US spent $539 million in 2020 on influencing regulation and public policy.
As institutions join the blockchain ecosystem, the demand for institutional-grade infrastructure is growing. The largest global banks, including JPMorgan Chase, Bank of America, and DBS Bank, amongst others, have invested in educating themselves on the topic of digital assets, and many are already venturing into offering products and services.
The entire technology stack from traditional finance is integrating the necessary tools to handle cryptocurrencies. There are custodian banks, market makers, paying agents, and clearing houses that are establishing themselves as trusted intermediaries for blockchain-based assets.
However, some key questions remain. How much of the cryptocurrency market capitalization and daily trading volume is done by institutions versus retail investors? The answer to this question helps us understand if crypto is mainly a retail phenomenon or if institutions already own a considerable chunk of the market. This report investigates the direction of the capital flow. Are professional traders currently buying or selling Bitcoin? Are institutions primarily interested in Bitcoin, Ethereum, or some other method for gaining exposure to blockchain technology, such as private equity or mergers and acquisitions? Do they plan to increase their exposure to blockchain over the next 12 months?
To answer these questions, Cointelegraph Research took a data-driven approach in the second annual Institutional Demand for Cryptocurrencies Global Survey 2022 Report. To gain a deeper understanding of how professional investors feel about blockchain assets, this 60+ page research report presents 32 questions about crypto assets answered by 84 wealthy investors across Asia, the US, and Europe.
This article is an extract from the 70+ page Institutional Demand for Cryptocurrencies Survey co-published by the Crypto Research Report and Cointelegraph Consulting, written by multiple authors and supported by Flow Trader, sFox, Zeltner & Co., xGo, veve, LCX, Finoa, Lisk, Shyft, Bequant, Phemex, GMI.