In view of the current economic climate, which has been exacerbated by the global pandemic, investors are looking for alternative investment options to consider.
According to information shared with Finbold, a recent study of institutional investors and financial managers who together manage roughly $108.4 billion in assets revealed that since the Coronavirus epidemic started, “43% say they now have a much more positive view of cryptocurrencies, and 35% say it has improved slightly.”
The research commissioned by Nickel Digital Asset Management, a London-based digital asset hedge fund manager founded by senior traders and investment professionals, also revealed that 78% of investors currently have a favorable or constructive view of Bitcoin, with just 9% having a negative one. For Ethereum, the comparable values are 77% and 7%, respectively.
Head of Institutional Sales, Nickel Digital Fiona King stated:
“Many cryptocurrencies have performed well since the Coronavirus crisis started. From 1st January 2020, the value of Bitcoin and Ethereum have increased by 460% and 1812% respectively.”
“The crypto and digital markets have also matured a great deal, providing greater custodial services and liquidity for example. There is still much more to be done – especially in the area of regulation – but the market will continue to evolve and grow, and as this happens long-term perceptions of crypto and digital assets will improve even further, and professional investors will increase their allocation to them.”
58% see strong capital growth in crypto
After being asked to identify their top three major reasons for adopting a more favorable perspective of cryptocurrencies since the pandemic began, 58% of professional investors highlighted significant capital growth, which was followed by 53% who said that numerous crypto and digital assets have shown appealing diversification advantages compared with traditional asset classes.
Survey participants also listed better custodial services as one of their top three reasons for becoming more optimistic about cryptocurrencies, while 41% also highlighted market capitalization increase and its favorable influence on liquidity as a factor.
The conclusions of the study are based on online interviews with 50 wealth managers and 50 institutional investors from the United States, the United Kingdom, Germany, France, and the United Arab Emirates, which were conducted in November 2021.
Ultimately, it appears in accordance with the research, institutional investors and wealth managers’ perceptions of cryptocurrency are shifting, as shown by the fact that since the Coronavirus crisis started the outlook towards digital assets have changed.