Around eight in 10 fund managers believe in wider crypto use, especially for the diversification benefits that it offers in a portfolio, a recent survey has revealed.
Nickel Digital Asset Management polled 200 institutional investors and wealth managers and concluded that most see crypto becoming mainstream.
Earlier this month, a report by the Wall Street Journal said top hedge funds were pouring billions into the sector. “More funds see crypto as a fifth asset class. It’s big enough now,” said Robert Bogucki, crypto investor and co-head of Galaxy Digital.
His view was backed by Fidelity Digital Assets’ Chris Tyrer, who said “crypto-native assets such as Bitcoin will play a very prominent role in investment portfolios going forward.”
Meanwhile, as the crypto market recovers from the weakness it experienced late last year, fund flows also remain positive. According to a CoinShares report, digital asset investment products have seen the largest inflows so far this year at $193 million in the past week.
“To a great extent, digital assets have already achieved escape velocity – they have achieved a multi-trillion dollar market cap, and there is gradual regulatory acceptance of them in key countries,” Nickel Digital CEO Anatoly Crachilov said.
Crachilov further added that this is clearly reflected in the “overwhelming majority of professional investors who believe digital assets will be mainstream.”
A 2021 study by PwC established that 86% of crypto-investing hedge funds wished to deploy more capital into the asset class in the future.
What happens in future depends on regulations
The rate of future adoption now seems dependent on regulations. The U.S. got its much-awaited Executive Order from President Joe Biden recently. And India went ahead and implemented a new taxation regime from April 1 to recognize the sector.
And the billionaire head of asset management company BlackRock expects the Ukraine war to accelerate digital currency adoption globally.
In the Middle East, the United Arab Emirates is aiming to become a global crypto hub, with Binance, FTX, Bybit, and Crypto.com all announcing new offices in Dubai.
A recent survey found that a majority (67%) of UAE residents are looking at cryptocurrencies as an investment within the next five years.