Institutional investors are showing growing interest in cryptocurrency assets, increasingly favoring long-term investments for potential stable returns.
Institutional Enthusiasm for Cryptocurrency
According to a recent survey by Sygnum bank, 57% of institutional investors plan to increase their crypto allocations. This is due to growing confidence in digital assets and a desire to manage risks. Many prefer investments in assets like Bitcoin and actively managed portfolios. Martin Burgherr from Sygnum highlights that clearer regulations play a key role in this process.
Regulation Favorable to Crypto Investments
Regulatory uncertainties have long deterred investor interest in crypto, but the scene is changing. Pro-crypto regulations are emerging in various regions, reducing sector volatility. Sygnum's survey highlights three main obstacles: asset security, volatility, and custody. Institutional interest focuses on layer one blockchains, such as Bitcoin and Solana.
Prospects and Challenges of DeFi
While interest in Web3 and decentralized infrastructures is growing, DeFi is losing appeal due to frequent hacks in 2023, amounting to more than 2 billion dollars in losses. Despite this, institutional players continue increasing Bitcoin purchases, driving an upward market dynamic.
The institutional market continues strengthening its position in cryptocurrency. Despite the high risks highlighted by recent DeFi incidents, institutional investors remain confident in boosting their crypto asset allocations.
