Why Institutional Investors Are Thinking Big About Crypto

The world seems to finally grasp the workings of crypto investment, and enthusiasm is especially growing among institutional investors. Beyond volatility, these players are now betting on accumulating positions over time, deeming it more rewarding to hold than to liquidate their assets. This growing appetite also relies on clearer regulations that are structuring the sector. In parallel, the launch of products like Bitcoin Spot ETFs, recently approved in the United States, could accelerate this institutional momentum.

Institutional Enthusiasm for Bitcoin and Co.

With a growing confidence in Bitcoin and cryptocurrencies in general, institutions are taking action. A recent survey from the Swiss bank Sygnum reveals that 57% of institutional investors plan to increase their allocations to crypto, some within just a few months.

📣 News: High-Risk Appetite and Long-Term Confidence Drives 57% of Institutional Investors to Raise Crypto Allocations: Sygnum Future Finance Survey

▪️ 57% of institutional and professional investors plan to increase long-term crypto allocations, demonstrating their high-risk… pic.twitter.com/fFHsz2cpyq

— Sygnum Bank (@sygnumofficial) November 14, 2024

This trend leaves little room for doubt: enthusiasm for digital assets has reached a new level.

Investment strategies remain varied:

• 44% of institutions prefer investments in single assets, like Bitcoin;
• 40% opt for actively managed portfolios, thus limiting their direct exposure to market fluctuations;
• 36% maintain their current position while waiting for a more favorable signal.

Martin Burgherr, client director of Sygnum Bank, emphasizes that increasingly clear regulations play a key role in this enthusiasm:

“The approval of Bitcoin Spot ETFs could well accelerate the institutional adoption of digital assets.“

Faced with these new prospects, institutional players appear inclined to tackle the challenges posed by technical and security risks.

Towards a Regulation Favorable to Crypto Investments

Regulatory uncertainties have long dampened the zeal of traditional investors in crypto. However, the scene is transforming: pro-crypto regulations are emerging in several regions, even in India, helping to reduce the perceived volatility of the sector. According to Sygnum’s survey, institutional investors remain vigilant on three obstacles: asset security, volatility, and custody.

Moreover, the profile of investments is sharpening. Institutional interest is focusing on layer one blockchains, with solutions like Bitcoin (BTC) and Solana (SOL) among their preferred assets.

The appeal of Web3, with its decentralized infrastructures, is also piquing interest, bolstered by the development of projects like DePIN (Decentralized Physical Infrastructure).

The realm of decentralized finance, on the other hand, is losing its luster. The scope of hacks in 2023 — estimated at over 2 billion dollars — has diminished institutional interest in this field.

In summary, the institutional market is intensifying its purchases, echoing Alex Adler’s analysis from CryptoQuant on the unprecedented buying pressure on Bitcoin. Despite the spectacular returns already secured, buying orders continue on major crypto platforms, thereby ensuring an upward dynamic.