A recent survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies has revealed that nearly 40% of institutional investors had exposure to crypto assets in 2023. This marks a significant increase from the 31% recorded in 2021.
The survey found that a third of respondents reported allocating at least 10% of their portfolio to crypto assets, compared to only a fifth of respondents two years ago.
When asked about the reasons behind their growing interest in cryptocurrencies, 67% of respondents cited the maturing market and custody infrastructure, a significant increase from the 14% recorded in 2021. Additionally, 58% mentioned the strong market performance of cryptocurrencies as a motivating factor for their investments.
The market performance of Bitcoin and Ethereum, the two largest cryptocurrencies, has been remarkable in recent years. Bitcoin experienced a 150% increase in 2023 and is up nearly 60% year-to-date. Similarly, Ethereum 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. This decision has made it easier for institutional investors to include cryptocurrencies in their portfolios.
Another survey conducted by the Digital Assets Council of Financial Professionals found that 35% of financial advisers intend to recommend crypto-related opportunities to their clients, compared to 21% at the end of the previous year.
Major sell-side firms, such as JPMorgan and AllianceBernstein, have also expanded their research coverage of digital assets, contributing to more sophisticated 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.
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, leading them to adopt a more proactive investor relations approach.
Overall, the survey results indicate a growing acceptance and interest in cryptocurrencies among institutional investors, driven by market maturation, strong performance, regulatory approvals, and increased research coverage.