The Rise of Cryptocurrency Investments Among Institutional Investors
Increasing Institutional Interest
According to a recent survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies, in 2023, close to 40% of institutional investors had exposure to crypto assets, a significant rise from the 31% reported in 2021. Notably, one-third of respondents disclosed that they had allocated at least 10% of their portfolios to cryptocurrencies, compared to just one-fifth of investors two years earlier.
Factors Driving Institutional Adoption
The survey highlighted that 67% of respondents attributed their increased interest in cryptocurrencies to the maturing market and improved custody infrastructure, a substantial jump from the 14% noted in 2021. Additionally, 58% of participants cited the strong market performance of cryptocurrencies as a key motivating factor for their investment decisions.
Discussing the market performance, the survey pointed out the remarkable growth of major cryptocurrencies. Bitcoin, the leading cryptocurrency by market capitalization, saw a 150% surge in 2023 and a nearly 60% increase year-to-date. Similarly, Ethereum, the second-largest cryptocurrency, experienced a rise of about 60% in 2024.
The approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) earlier this year played a crucial role in facilitating institutional access to the crypto asset class. This decision marked a significant shift, making it easier for institutions to integrate cryptocurrencies into their investment portfolios.
Another study by the Digital Assets Council of Financial Professionals highlighted a growing trend among financial advisers in recommending crypto-related opportunities to clients, with 35% of advisers planning to advocate for digital asset investments, up from 21% the previous year.
The increasing interest in cryptocurrencies has not been limited to North America. In Hong Kong, recent regulatory clarity and approvals of Bitcoin and Ethereum spot ETFs have sparked heightened attention from both institutional and retail investors. Notably, OSL Group, a digital assets company listed in Hong Kong, has witnessed a surge in investor interest, prompting a more proactive investor relations strategy.
Hong Kong’s introduction of ETFs focused on cryptocurrencies has posed potential competition to similar products in the US market. Harvest Global Investments Ltd. and partnerships between HashKey Capital Ltd. and Bosera Asset Management (International) Co. have listed Bitcoin and Ether ETFs in the city, further fueling the cryptocurrency investment landscape.
