Nearly 40% of Institutional Investors Had Crypto Exposure in 2023, Survey Reveals

Nearly 40% of institutional investors had some exposure to crypto assets in 2023, a notable rise from the 31% recorded in 2021.

A recent survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets Strategies has revealed a significant increase in institutional investors’ interest in cryptocurrencies.

Per the survey, a third of respondents reported having at least 10% of their portfolio allocated to crypto assets, compared to only a fifth of respondents two years ago.

Institutional Investors Enter Crypto Amid Maturing Market

The survey also explored the reasons behind institutional investors’ growing interest in cryptocurrencies.

A majority of respondents, 67%, cited the maturing market and custody infrastructure as a significant factor, a significant increase from the 14% recorded in 2021.

Furthermore, 58% of respondents mentioned the strong market performance of cryptocurrencies as a motivating factor for their investments.

The market performance of cryptocurrencies, particularly Bitcoin and Ethereum, has been remarkable in recent years.

Bitcoin, the world’s largest cryptocurrency by market capitalization, has experienced a 150% increase in 2023 and is up nearly 60% year-to-date.

Similarly, Ethereum, the second-largest cryptocurrency, has risen by approximately 60% in 2024.

The approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January of this year has played a significant role in boosting institutional investors’ access to the crypto asset class.

After years of failed applications, the SEC’s decision has made it easier for institutional investors to include cryptocurrencies in their portfolios.

Another recent poll conducted by the Digital Assets Council of Financial Professionals indicates a sharp rise in the number of financial advisers planning to recommend crypto-related opportunities to their clients.

The survey found that 35% of respondents intend to encourage their clients to invest in the digital assets space, compared to 21% at the end of the previous year.

The increased interest in cryptocurrencies has prompted a broader coverage of digital assets by major sell-side firms, such as JPMorgan and AllianceBernstein.

This expanded research coverage has contributed to more sophisticated and nuanced conversations between investor relations (IR) professionals and institutional investors.

IR teams have observed a notable shift in investor understanding and knowledge of cryptocurrencies, with discussions focusing on more advanced topics compared to previous years.

Crypto Sees Increase in Interest in Hong Kong

The increased interest in cryptocurrencies has also been observed in Hong Kong, where regulatory clarity and recent approvals of Bitcoin and Ethereum spot ETFs have contributed to a surge in institutional and retail investor focus.

OSL Group, a Hong Kong-listed digital assets company, has experienced a significant uptick in interest from investors, and their investor relations approach has become more proactive as a result.

As reported, Hong Kong has launched its first batch of ETFs focused on cryptocurrencies, marking potential competition for the popular Bitcoin products in the United States.

Harvest Global Investments Ltd., the local unit of China Asset Management, along with a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co., listed Bitcoin and Ether ETFs in the city on Tuesday.