Institutions Bullish on Crypto Despite Bear Market: Report
A recent report by crypto data provider Amberdata and global financial services analyst Coalition Greenwich reveals that institutional investors remain optimistic about digital assets, even during the ongoing bear market. The report surveyed sixty asset managers, including hedge funds, venture capital firms, and family offices, primarily from the US, Europe, and the UK. It found that 48% of the respondents currently have digital assets under management (AUM). While most institutions hold between $1-10 million in digital assets, 19% manage between $11-50 million, and only one institution operates over $1 billion in AUM. Despite concerns about the regulatory environment, 85% of the respondents believe that the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will provide positive opportunities for digital asset adoption. However, challenges such as regulatory uncertainties, security practices, custodying digital assets, and blockchain performance continue to hinder institutional involvement in the crypto space.
Crypto Roadblocks and Institutional Commitment
The report highlights several roadblocks faced by institutions that are not currently involved in crypto, including regulatory uncertainties, lack of common KYC/AML technology, unclear tax policies, custody complexities, security challenges, and blockchain performance issues. Nevertheless, one in every four institutions surveyed already has a dedicated role focused on digital assets, and this number is expected to grow by 13% in the next twelve months. The report’s findings indicate that many institutions are prioritizing crypto products and services despite the current bear market. Additionally, despite the collapse of FTX, a significant number of asset managers still expect centralized exchanges to grow over the next five years.
Hot Take
The report reveals that institutional investors are not deterred by the crypto bear market and remain optimistic about digital assets. Despite concerns about the regulatory environment and various challenges, institutions are committed to offering specialized crypto services and expect positive opportunities in the future. This suggests that institutional involvement in the crypto space will continue to grow, contributing to the mainstream adoption of digital assets.
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