Survey Reveals Nearly 40% of Institutional Investors Had Crypto Exposure in 2023
A recent survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies has unveiled a significant increase in institutional investors’ interest in cryptocurrencies. The survey found that nearly 40% of institutional investors had some exposure to crypto assets in 2023, marking a notable rise from the 31% recorded in 2021.
The survey also explored the reasons behind this growing interest in cryptocurrencies among institutional investors. The majority of respondents, 67%, cited the maturing market and custody infrastructure as a significant factor, a substantial increase from the 14% recorded in 2021. Additionally, 58% of respondents mentioned the strong market performance of cryptocurrencies as a motivating factor for their investments.
The market performance of cryptocurrencies, particularly Bitcoin and Ethereum, has been remarkable in recent years. Bitcoin, the world’s largest cryptocurrency by market capitalization, experienced a 150% increase in 2023 and is up nearly 60% year-to-date. Similarly, Ethereum, the second-largest cryptocurrency, has risen by approximately 60% 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 significant role in boosting institutional investors’ access to the crypto asset class. After years of failed applications, the SEC’s decision has made it easier for institutional investors to include cryptocurrencies in their portfolios.
Another recent poll conducted by the Digital Assets Council of Financial Professionals indicates a sharp rise in the number of financial advisers planning to recommend crypto-related opportunities to their clients. The survey found that 35% of respondents intend to encourage their clients to invest in the digital assets space, compared to 21% at the end of the previous year.
The increased interest in cryptocurrencies has prompted major sell-side firms, such as JPMorgan and AllianceBernstein, to expand their research coverage of digital assets. This expanded coverage has contributed to more sophisticated and nuanced conversations between investor relations (IR) professionals and institutional investors. IR teams have observed a notable shift in investor understanding and knowledge of cryptocurrencies, with discussions focusing on more advanced topics compared to previous years.
The increased interest in cryptocurrencies has also been observed in Hong Kong, where regulatory clarity and recent approvals of Bitcoin and Ethereum spot ETFs have contributed to a surge in institutional and retail investor focus. OSL Group, a Hong Kong-listed digital assets company, has experienced a significant uptick in interest from investors, leading to a more proactive investor relations approach.
Hong Kong has also launched its first batch of ETFs focused on cryptocurrencies, introducing potential competition for popular Bitcoin products in the United States. Harvest Global Investments Ltd., the local unit of China Asset Management, along with a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co., listed Bitcoin and Ether ETFs in the city on Tuesday.
