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Institutional Crypto Investors Unwaveringly Bullish on Digital Asset Future, According to Coinbase

Last Updated November 17, 2023 3:54 PM
Teuta Franjkovic
Last Updated November 17, 2023 3:54 PM
Key Takeaways
  • A majority of crypto investors plan to increase their investments over the next three years.
  • Nearly half of institutional investors without crypto holdings intend to enter the market within the next three years.
  • A significant portion of institutional investors anticipate a price increase in the next 12 months.

One year after upheavals in the crypto ecosystem, institutional investors remain dedicated to the crypto space, actively engaging in investments and expressing optimism about the future, as revealed by a recent survey commissioned by Coinbase .

Institutional investors remain steadfast in their embrace of cryptocurrency, exhibiting unwavering resilience and optimism amidst the current market cycle. A recent survey conducted by Institutional Investor , encompassing 250 institutional investors, underscores this unwavering belief in the future of digital assets.

Allocations On The Rise As Investors Regain Confidence

The survey  reveals a marked improvement in sentiment compared to the previous year. Undeterred by the broader market upheavals, institutional investors have maintained their commitments to cryptocurrency, continuing to invest and explore the vast potential of blockchain technology.

In the face of the crypto winter, the rallying cry was “time to build.” This mantra has resonated deeply within the institutional community, as evidenced by their unwavering support for cryptocurrency over the past year.

In the last 12 months, a third of surveyed institutional investors have raised their crypto allocations, while only 17% have reduced them (with 50% maintaining unchanged allocations).

Looking ahead, 64% of current crypto investors anticipate an increase in their firm’s crypto allocations over the next three years, with none expecting a decrease during this period.

For institutions not currently invested in crypto, nearly half (45%) anticipate making investments in the next three years.

BTC institutional investors
Credit: Coinbase

The positive outlook on allocations aligns with the anticipation of rising crypto asset prices in 2024. The optimism has surged, with 57% of respondents expecting prices to trend higher in the next year, a substantial increase from the 8% who anticipated higher prices in 2023.

In comparison to 14 other asset classes, crypto secured the third position concerning the opportunity for risk-adjusted returns over the next three years. Private equity was viewed as the most promising, followed by US equities, occupying the second-largest opportunity.

asset returns
Credit: Coinbase

To unleash the potential performance of crypto, investors continue to emphasize the necessity for regulatory clarity. Over three-fourths (76%) of surveyed individuals concur that the absence of sensible and well-defined crypto regulations jeopardizes the United States’ standing as a leader in financial services.

Institutional Investors Recognizing Crypto Transformative Potential

In addition to its investment potential, institutional investors see blockchain technology as having the potential to revolutionize payments and trade settlement. According to the survey, 73% of institutional investors consider blockchain a faster and more secure method of payments compared to the traditional banking system. A slightly lower percentage, 66%, believes that blockchain will eventually replace legacy trade-settlement systems.

The survey also indicates that advancements in these domains could serve as the next catalyst for industry growth. 66% of institutional investors expressed the view that the emergence of more real-world applications or tangible economic value will be the next catalyst.

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