A new study commissioned by cryptocurrency insurer Evertas, a cryptocurrency insurance company, shows that institutional investors plan to increase their efforts in bitcoin (BTC) and other digital assets in the future.
After reconciling 50 institutional investors who jointly manage over $ 78 billion in US and UK assets, the remarkable answer was that 26% of respondents believe pension funds, insurance companies, family offices and government wealth funds will raise interest rates in cryptocurrencies. … “Radical”.
64% of the respondents believe that the growth in engagement will be moderate, but the group also expects hedge funds to be more active in cryptocurrency. 32% of respondents believe that hedge funds will significantly increase their holdings of cryptocurrencies.
Businesses have a love-hate relationship with cryptocurrencies
Institutional investors seem to be interested in investing in bitcoins and other cryptocurrencies in part because they believe that the rules for the cryptocurrency market will improve and become clearer in the future.
Others believe that the market will eventually grow, providing the best liquidity required by most institutional investors. As the market situation improves, many also believe that there will be a wide range of institutional investment funds.
The survey also showed that there are still many obstacles to the institutionalization of cryptography. More than half of respondents said they were concerned about the lack of digital property insurance, while others expressed concern about the quality of security services, commercial offices, reporting tools and actions from other companies operating in the sector.
J. Gdansky, CEO and founder of Evertas, told the Cointelegraph:
Our research shows that institutional investors are interested in increasing exposure to cryptocurrencies and cryptocurrencies in general, but it is clear that there are several infrastructure issues that support these markets that continue to concern them. It is clear that these questions must be resolved if we want to realize the full potential of institutional investors’ investments in cryptocurrencies. ”
While the outlook for regulation of Bitcoin and other established cryptocurrencies may be positive among institutional players, this may not be true for other sectors in the cryptocurrency space.
These sectors include Decentralized Finance (DeFi) and stack coins, which have experienced explosive growth by 2020 and may soon face their own regulatory hurdles.
Institutions ignore Bitcoin volatility with overview
Although the price of bitcoin does not rally after the halving that many investors have expected, institutions are still interested in the bitcoin currency. Bakk’s bitcoin futures trading volume recently hit a new full-time high of over $ 200 million in bilateral contracts, indicating that institutions are still hoarding BTC.
Furthermore, large fund managers are beginning to enter the market, which most Evertas respondents believe is an important factor in the institutional adoption of cryptocurrencies.
Just last week, MicroStrategy’s CEO Michael Sailor followed in the footsteps of experienced investor Paul Tudor Jones by buying 21,454 bitcoins. Earlier that year, Jones revealed his share of bitcoin, calling the assets the “fastest horse” with the best performance when it comes to performance odds.
As interest in cryptocurrencies grows and the regulatory landscape for these assets disappears, the tide of Bitcoin-trading institutions is expected to continue to grow.