Why institutional investors are thinking big with crypto

The world finally seems to understand the workings of investing in crypto, and enthusiasm is especially gaining from institutional investors. Beyond volatility, these players now rely on the accumulation of positions over time, deeming it more profitable to hold than to sell their assets. This growing appetite is also based on the clearer regulations that structure the sector. At the same time, the launch of products like the Bitcoin Spot ETFs, recently approved in the United States, could accelerate this institutional dynamic.

Illustration of institutional investors in cryptocurrencies

Institutional craze for Bitcoin and company

With growing confidence in Bitcoin and cryptocurrencies in general, institutions take action. A recent Swiss bank survey Sygnum reveals that 57% of institutional investors plan to increase their crypto allocationsome within just a few months.

https://twitter.com/sygnumofficial/status/1856970321514889573

This trend leaves little room for doubt: theenthusiasm for digital assets has reached a new milestone.

Investment strategies remain varied:

  • 44% of institutions prefer investments in single assets, such as Bitcoin;
  • 40% opt for actively managed portfolios, thus limiting their direct exposure to market fluctuations;
  • 36% maintain their current position while waiting for a more favorable signal.

Martin Burgherr, customer director at Sygnum Bank, emphasizes that increasingly clear regulations play a key role in this craze:

The approval of Bitcoin Spot ETFs could well accelerate institutional adoption of digital assets. »

Your first cryptos with Swissborg
This link uses an affiliate program

Faced with these new perspectives, institutions seem inclined to take up the challenges posed by technical and security risks.

Towards regulation conducive to crypto investments

Regulatory uncertainties have long dampened the enthusiasm of traditional investors in crypto. However, the scene changes: pro-crypto regulations emerge in several regionseven in India, helping to reduce the perceived volatility of the sector. According to the Sygnum survey, institutional investors remain vigilant on three obstacles : asset security, volatility and custody.

Furthermore, the investment profile is becoming more refined. Institutional interest focuses on first-level blockchainsand solutions like Bitcoin (BTC) and Solana (SOL) are among their preferred assets.

The attraction for Web3, with its decentralized infrastructures, is also arousing interest, reinforced by the development of projects like DePIN (Decentralized Physical Infrastructure).

The universe of decentralized finance, meanwhile, is losing its luster. The magnitude hacks in 2023 — estimated at more than $2 billion — has reduced the attractiveness of institutions for this field.

In short, the institutional market is intensifying its purchases, reminiscent of CryptoQuant's Alex Adler's analysis of the unprecedented buying pressure on Bitcoin. Despite the spectacular returns already achieved, purchase orders continue on the main crypto platforms, thus ensuring upward momentum.

Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.

Similar Posts