A Research Report by blockchain think tank, Crypto Research finds that 61% of Europe’s elite investors have, or are planning to, dip their toes in the digital asset waters. The report, Discovering Institutional Demand for Digital Assets, also takes a look at which cryptographic coins Europe’s upper echelon of investors have put value behind, and which they plan on accumulating, in the next few months.
The research paper, spanning over 70 pages, prepared in collaboration with Cointelegraph Consulting, was put together by 8 authors. The research team, consisting of members from four countries, conducted a survey to gauge the institutional investors’ general appetite for digit assets I’m German-speaking Europe. The reason for this being, that the region’s regulatory regime is quite entrepreneur-friendly, resulting in it becoming a center for blockchain innovation.
The study, headed by Demelza Hays, weighed the investment appetites of about 55 qualified financial industry professionals; from insurance firms, to pension funds, banks, asset managers to family offices, no stone left unturned. In addition to covering what cryptographic assets these financial industry juggernauts have, or are planning to add to their portfolios in the next year, the report discusses what blockchain/cryptocurrency focused investment vehicles are currently available – as well as realized returns and underlying risks.
Early investors in digital assets have long prophesied about the coming of institutional capital, and how the influx of classic financial players into the fledgling space would be an event that legitimized the asset class enough to gain it a mass audience. With JP Morgan, Visa, MasterCard, and most recently, PayPal – among other financial incumbents – leaning crypto, the stage appears to be set for an o stampede into digital assets.
Though some may downplay the potential impact that institutional capital would have on crypto, however the paper points out that the greater chunk of global capital is in the hands of institutional investors. As such, the entry of incumbent finance into the space would be a boon for the asset class in terms of market capitalization, trading volumes, and prices overall. Institutional interest in cryptocurrencies is also identified as one of the main drivers of innovation in the digital assets, and decentralized ledger technology space.
To Crypto Or Not To Crypto?
The Crypto Research/ Cointelegraph research endeavor uncovered some interesting tidbits, regarding German Europe’s stance regarding betting value on digital assets, and blockchain based financial instruments. Professional investors, in the region, appear to be quite – at the risk over using the term – bullish on digital assets, with their interest primarily focused on a particular category of the hatchling asset class.
The study found that a collective warchest of €719 billion ( has already been plunged into Assets Under Management by some of the 55 firms surveyed – nearly double the entire digital asset classes’ market capitalization. In fact, 36% already have digital assets as part of their investment strategy, in some way or form; directly holding/trading digital assets, stablecoins, or equity tokens, or through funds, structured products, or derivatives. The survey respondents collectively manage about €6 billion in digital assets, which amounts to circa 2% of crypto industry’s market capitalization.
Of the 64% of firms that have not yet taken a dip into the volatile waters of digital asset markets, 39,29% plan to gain some degree of exposure within the next year. Altogether, that translates to a little over 61% of survey participants who either have, or plan to, invest in cryptocurrencies.
Benchmark digital assets, Bitcoin & Ethereum, still reign as King & Queen of the hill, in terms of being gateway digital assets, with 88% having bought into Bitcoin, and 75% having added some Ethereum to their portfolios. The tide looks to be shifting in favor of security tokens however, with 39% of investors that were planning to invest in digital assets at a later stage, casting a glance at equity tokens. Smaller family offices, interestingly, were found to be more likely to bet on blockchain-oriented assets than banks, fund managers of any of the other major financial players were.
The Study also found that, although the mood within the region is quite open to crypto investment, institutional investors – as yet – prefer a passive approach to digital asset investment, opting to invest in one asset. A possible attestation to this fact, is that the most popular, regulated, crypto fund in the region is Bitcoin-based. As a matter of fact, Bitcoin is the go-to digital asset for institutional investors in the region. There’s much room, that still remains, for innovation – as it appears – because research results show that the region’s institutional investors are interested in blockchain-based financial products (venture capital funds, derivatives, private key insurance) that seem to be lacking in German Europe.
