Why Are Many Institutional Investors Not Entering the Crypto Market?
While institutional investors are becoming more active in the crypto market, these numbers are not meaningful. Institutions are still not fully entering crypto with the exact same trust.
A leading digital asset management company recently conducted new research that identified the top reasons blue-chip investors avoid investing in crypto markets.
Nickel Digital Asset Management conducted a survey of 100 institutional investors and professional wealth mangers across the US, Europe and the United Arab Emirates. The results were nearly $110 billion.
According to the survey, the main reasons why investors aren’t investing in crypto assets were price volatility, security concerns, market cap, regulatory uncertainty, and current regulatory conditions.
79% cite security of assets as the number one reason not to invest in digital assets and cryptocurrencies. The top three reasons are price volatility (67%), market cap (56%), and regulatory environment (49%).
Another 12% state that digital assets have a high carbon footprint, which is one of the top three reasons they dislike. Henry Howell, Nickel Digital’s head of business, stated:
“Our research has shown that institutional investors correctly identified security and custodians as key differentiators in this unique asset class.”
Many respondents were optimistic about the future regulation of the crypto industry and the price of digital assets.
Over 75% of respondents believe that Congress will grant the US Securities and Exchange Commission (SEC), the authority to supervise crypto trading and lending over the next year.
73% of respondents believe regulation will have an impact on the digital asset market prices. 32%, however, think it will have a greater positive effect.
It’s possible to create regulations for crypto and have them implemented. This will allow institutional investors to increase their influx very quickly. This must be observed and tracked to its development