Institutional Investors Are Onboarding The Crypto Train As Prices Remain Down

It Turns Out That Institutional Investors Are Still Seeing A Long-Term Potential In The Crypto Sector, Despite The Turbulences In 2022

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Institutional players seem to have been loading their bags throughout 2022, despite the crypto sector going on a rollercoaster ride due to many unforeseen obstacles, according to a Coinbase-sponsored survey.

Indeed, the survey highlighted that 62% of institutional investors entered or expanded their allocation in cryptos over the past 12 months. On the flip side, only 12% had shrunken their crypto exposure, which showcases that most institutional investors are still bullish on digital assets in the long term.

The majority of institutional investors stated that they were currently, or planning, to use a buy-and-hold approach for cryptocurrencies, indicating that their hopes are crypto prices would stay the same or trade within a narrow margin over the next 12 months. 

Looking over the next three years, 58% of respondents said they expected to increase their portfolio’s allocation to crypto, believing that crypto valuations will increase over the long term. However, regulatory uncertainty is still a major problem for institutional investors, as most investors were concerned about it when making a decision to enter the sector or increase the allocation of funds towards cryptos.

The survey, released on November 22 and conducted between September 21 and October 27, consisted of 140 institutional investors in the United States who collectively have assets under management totaling around $2.6 trillion. 

Fidelity also thinks institutional investors are onboarding the crypto train

Another survey, this time conducted by Fidelity Investments subsidiary, Fidelity Digital Assets, released on October 27, reveals a similar fashion. However, both surveys were conducted before the collapse of the FTX exchange, which is still rocking the boat of the crypto sector and saw the entire crypto market cap to plummet below $800 billion after waiting months to return over $1 trillion. 

“They’re agnostic to some of this crazy volatility and price because they're looking at it from a very long-term perspective. They’re looking over the next years, five years, decade, or more.” Fidelity head of research Chris Kuiper noted.

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