The institutional interest in cryptocurrencies has shown a significant increase in recent years, with nearly 40% of institutional investors having exposure to crypto assets in 2023, up from 31% in 2021. A survey conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies revealed that a third of respondents had at least 10% of their portfolio allocated to crypto assets, compared to only a fifth of respondents two years ago. The reasons behind this growing interest include the maturing market, improved custody infrastructure, and strong market performance of cryptocurrencies, particularly Bitcoin and Ethereum.
The market performance of cryptocurrencies, such as Bitcoin and Ethereum, has been remarkable in recent years, with Bitcoin experiencing a 150% increase in 2023 and Ethereum rising 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, leading to increased interest in the digital assets space among financial advisers and investors.
A poll conducted by the Digital Assets Council of Financial Professionals indicates a sharp rise in the number of financial advisers planning to recommend crypto-related opportunities to their clients. The survey found that 35% of respondents intend to encourage their clients to invest in the digital assets space, compared to 21% at the end of the previous year. Major sell-side firms, such as JPMorgan and AllianceBernstein, have expanded their research coverage of digital assets, leading to more sophisticated and nuanced conversations between investor relations (IR) professionals and institutional investors. Investor understanding and knowledge of cryptocurrencies have also significantly improved, with discussions focusing on advanced topics.
In Hong Kong, there has been an increase in institutional and retail investor focus on cryptocurrencies, thanks to regulatory clarity and the recent approvals of Bitcoin and Ethereum spot ETFs. OSL Group, a Hong Kong-listed digital assets company, has experienced a surge in interest from investors, prompting a more proactive investor relations approach. The city has launched its first batch of ETFs focused on cryptocurrencies, marking potential competition for popular Bitcoin products in the United States. Harvest Global Investments Ltd. and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. listed Bitcoin and Ether ETFs in Hong Kong, further fueling the interest in digital assets among investors in the region.
