96% of investors see potential in cryptos, but where is the brake?

Institutional investors are increasingly asserting and proving their interest in cryptocurrencies. And, if they are aware of the strong potential of these digital assets, most of them are reluctant to get started. The cause ? Growing regulatory uncertainty in the United States.

Yes for cryptos! But not without the TradFi giants

The cryptocurrency sector continues to attract institutional investors, but many of these financial institutions are reluctant to materialize this interest in digital currencies with significant investments. Laser Digital, a subsidiary of Japanese financial holding company Nomura, has conducted an investigation to shed light on the reasons for this mistrust of institutional investors.

More than 300 opinions were collected with respondents with varied profiles. Wealth managers, insurance asset managers, pension funds and many other institutional investors from 21 countries in Europe, Asia, Africa, Latin America and the Middle East responded. 96% of investors surveyed recognized the potential of cryptocurrencies. According to them, these assets represent “an opportunity for investment diversification”.

More concretely, in addition to traditional assets, institutional investors can also invest in cryptos if they wish. Except that not everything is so simple and 90% of institutional investors surveyed do not plan to get into cryptos as things stand. They claim that the support of a “large traditional financial institution” is imperative before they decide to invest in these digital currencies.

Regulatory uncertainty in the United States: the pitfall that dampens enthusiasm

While legal and regulatory restrictions are identified by three quarters of respondents as the major obstacle to investing in cryptocurrencies, Europe seems to have taken a step ahead with the adoption of the MiCA law to regulate the activities crypto firms. Conversely, the United States is plagued by regulatory uncertainty which is visibly dampening institutional enthusiasm for these digital assets.

Moreover, these last few weeks have been very tumultuous in the cryptosphere, particularly with the attacks of the SEC against two major exchanges: Binance and Coinbase. Many experts and investors have reacted to these different procedures, and believe that it is time to establish a clear and comprehensive framework to govern the industry. Recently, US investment bank JP Morgan also urged lawmakers to regulate the crypto industry.