Increasing Institutional Adoption of Cryptocurrency

Despite challenging economic conditions and a bear market, institutional adoption of cryptocurrency is growing. Investors remain optimistic about crypto’s future in financial settlements.

A recent survey carried out by Coinbase, a leading U.S. crypto exchange, revealed that 64% of institutional investors currently investing in crypto plan to increase their digital assets allocations in the next three years. None of the respondents expect to decrease their allocations in the same time frame.

Findings of the Coinbase Survey

Conducted from October 19 to November 6, 2023, the survey involved 250 decision makers from various U.S. institutions like hedge funds, venture capital firms, pensions, foundations, endowments, family offices, sovereign wealth funds, and asset management firms. It focused on institutions currently investing in crypto, those considering investments, and those that have previously invested.

According to the survey, in the past 12 months, 33% of respondents increased their crypto allocations, 17% decreased theirs, and 50% remained unchanged. Nearly 45% of institutions not yet invested in crypto plan to enter the sector in the next three years.

Optimistic Sentiment and Views on Blockchain

Compared to the previous year’s survey, a larger number of investors in this survey expect prices of crypto assets to rise in 2024. Additionally, 73% of investors see blockchain as a faster and more secure payment method than traditional banking, with 66% believing that blockchain will replace conventional trade-settlement systems.

However, 76% of the survey participants noted that the lack of clear crypto regulations in the U.S. is hindering the country’s position as a leader in financial services. They emphasized the need for regulatory clarity and believe that progress in regulations and real-world crypto applications will drive industry growth.

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Crypto ranked third among 15 asset classes evaluated for their potential to generate attractive risk-adjusted returns in the next three years, following private equity and U.S. equities.

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