The Institutional Demand for Cryptocurrencies: Global Survey 2022 report puts rumors about falling institutional demand for cryptocurrencies to rest.
Microstrategy ($2.8 billion), Tesla ($500 million), and Stone Ridge Asset Management ($188.17 million) are the three largest institutional holders of cryptocurrencies.
Bitcoin (94%) and Ether (75%) are two of the most preferred crypto assets among institutional investors.
A question cropping up again and again amid this so-called bear market is whether the interest towards cryptocurrencies is taking a back seat among institutional investors. To answer this question and put the rumors about falling institutional interest in cryptocurrencies to rest, Shyft Network joined hands with Cointelegraph Research on its latest report, titled “Institutional Demand for Cryptocurrencies: Global Survey 2022.”
Interestingly, instead of a fall in interest among professional investors, the report points towards significant interest among institutions to join the blockchain ecosystem. The tendency is evident in a surge in demand for institutional-grade infrastructure. So, without further ado, let’s dive straight into it.
At a company level, the Cointelegraph report focused on traditional companies that have disclosed their cryptocurrency holdings. The list of ten largest institutional cryptocurrency investors has Microstrategy on top, with a total investment of US$2.8 billion, followed by Tesla (US$500 million) and Stone Ridge Asset Management (US$188.17 million).
For many institutional investors, like Thomas Zeltner, CEO of Zeltner & Co, Cryptocurrencies are a unique diversification opportunity. Going a step further, Zeltner believes that investment in cryptocurrencies is every family’s opportunity to invest a part of its assets in future technologies.
Keeping it in line with the asset distribution pattern in the market, professional investors are primarily holding Bitcoin (94%) and Ether (75%). Among other assets, investors are interested in Stablecoins (31%), Security Tokens (31%), Polkadot (25%), Litecoin (13%), Solana (13%), and XRP (6%).
When it comes to tokenized securities, not necessarily all institutional investors are bullish on NFTs. Yet, the report could identify two prominent reasons for institutional investors to have faith in the future of NFTs.
The first category of investors believed in acquiring “blue-chip” NFT projects, similar to Visa’s purchase of CryptoPunk. The other segment of investors viewed NFTs as certificates of ownership of underlying assets.
Several globally-revered brands have also started realizing significant revenue from NFTs, compounding the industry’s faith in tokenized securities. Nike, the iconic footwear & apparel brand, topped the charts with earnings of over US$185 million from NFTs alone.
Blackrock, a global asset manager with US$10 trillion in assets, has announced its second blockchain ETF, while Goldman Sachs took on principal risk in a crypto OTC trade for the first time with Galaxy Digital. On the other hand, Bridgewater Associates, the largest hedge fund in the world, announced their decision to back a Bitcoin fund, while Fidelity was weighing a plan to allow its brokerage customers to trade in Bitcoin.
Such developments underline that the interest of professional investors towards cryptocurrencies remains intact, with 43% of professional investors surveyed in the report already holding digital assets and 19% planning to buy them in the future.
Speaking of factors discouraging professional investors from investing in crypto assets, one of every four professional investors has said that regulatory limitations are holding them back from buying Bitcoin. That said, this will likely change with increasing regulatory clarity, with players like Shyft Network coming into the picture.
With Shyft Network’s Veriscope, which is the only Travel Rule Solution that can address the Sunrise Issue, Virtual Asset Service Providers (VASPs) can easily comply with the FATF’s globally-focused Travel Rule. By doing so, Veriscope addresses a significant concern among regulators that malicious actors are turning to digital assets for money laundering and terrorism financing due to the anonymous nature of crypto transactions.
So what is it that Veriscope does? Simply put, it enables VASPs to share Travel Rule data among themselves easily and, in the process, get authorities to trust the crypto ecosystem by preventing malicious parties from abusing virtual assets for illicit activities. As such, in time, the crypto industry will achieve regulatory parity with the traditional financial sector, and thus, professional investors will no longer be discouraged from investing in cryptocurrencies.
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