Institutional Investors Plan to Buy at Every Bitcoin Price Drop, Data Suggests
The new survey data shows that institutional investors intend to increase their Bitcoin allocations regardless of short-term drops in the price of BTC.
A new survey commissioned by crypto insurance company Evertas, a cryptocurrency insurance firm, found that institutional investors plan to significantly increase their holdings in Bitcoin (BTC) and other digital assets in the future.
After surveying 50 institutional investors who collectively manage more than $ 78 billion in assets in the United States and the United Kingdom, a prominent response was that 26% of the participants believe that pension funds, insurance companies, family offices and sovereign wealth funds will increase their holdings in cryptocurrencies “dramatically.”
64% of participants believe that the increase in engagement will be moderate, but the group also expects hedge funds to become more actively involved in cryptocurrencies. 32% of respondents believe that hedge funds will dramatically increase their holdings of cryptocurrencies.
Institutions have a love-hate relationship with cryptocurrencies
Institutional investors appear to be interested in investing in Bitcoin and other cryptocurrencies in part because they believe that regulations for the cryptocurrency market will improve and become clearer in the future.
Others believe that the market will eventually get bigger, providing better liquidity, a feature that most institutional investors require. As the market improves, many also believe that there will be a wider range of investment vehicles for institutions to choose from.
The survey also found that there are still many obstacles on the way to institutionalizing crypto. More than half of the participants said they are concerned about the lack of insurance for digital assets, while others are concerned about the quality of custody services, trading desks, reporting facilities and the procedures of other companies working in the sector.
J. Gdanski, CEO and founder of Evertas, told Cointelegraph:
“Our research shows that institutional investors are excited about increasing their exposure to cryptocurrencies and crypto assets in general, but clearly there are many issues related to the infrastructure supporting these markets that still concern them. These clearly need to be addressed if the full investment potential of institutional investors in crypto assets is to be harnessed. “
While the outlook on the regulation of Bitcoin and other established crypto assets may be positive among institutional players, the same may not be true for other sectors of the cryptosphere.
Such sectors include decentralized finance (DeFi) and stablecoins, which have seen massive growth in 2020 and may soon face their own regulatory hurdles.
Institutions Ignore Bitcoin Volatility At First Sight
While the price of Bitcoin has not lived up to the post-halving rally that many investors anticipated, institutions remain interested in Bitcoin. Recently, Bakkt’s Bitcoin futures trading volume hit a new high of over $ 200 million in exchanged contracts, suggesting that institutions are still hoarding BTC.
Additionally, conventional fund managers are starting to enter the market, a sign that most Evertas survey participants believe is a major factor in institutional adoption of crypto.
Last week, MicroStrategy CEO Michael Saylor followed in the footsteps of veteran investor Paul Tudor Jones by buying 21,454 BTC. Earlier in the year, Jones revealed his stake in Bitcoin, describing the assets as the “fastest horse” with the best odds for returns.
As investor interest in crypto assets grows and the regulatory landscape for these assets becomes clearer, the wave of institutions flocking to Bitcoin is expected to continue to rise.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.