State Street Digital and Oxford Economics have released their joint survey on the future of digital assets.
The survey, which polled 300 institutional investors in October 2021, found that the vast majority (82%) of respondents were allowed access to cryptocurrencies, with 70% looking to increase their allocations this year and 81% planning to increase their allocations over the next 2 years – 5 years. Despite this, less than half (49%) say they have a solid understanding of cryptocurrencies, and even fewer (28%) say they understand cryptocurrency mining. As financial institutions look to remain bullish on this asset class, it is clear that this knowledge gap needs to be closed to ensure long-term success.
Key findings include.
- Bitcoin continues to dominate the cryptocurrency space: asset managers are looking for huge gains from investing in bitcoin – 53% of respondents are interested in cryptocurrencies, with 41% of them saying they were exposed to bitcoin because of its potential for superior returns
- Asset managers are concerned about cybersecurity, transparency and regulation. Cybersecurity tops the list, with 44 percent of respondents citing it as a top priority, compared to 41 percent for transparency and 39 percent for regulation
- The largest organizations (by AUM) have a deeper understanding of digital assets and are more bullish about their prospects: these organizations (over $500 billion in assets) are more likely to hold digital assets directly (55% )
- Custody is critical: Overall, regardless of title, respondents agreed that the responsibility of monitoring the digital asset space belongs to investment personnel as part of their job. Their ability to seamlessly exchange data in real time with other industry platforms (51%) was cited as the most important quality of a digital asset custodian
Click here to read the full survey.