Nearly three out of four (74%) institutional investors and wealth managers questioned say their organisation will increase its level of investment in the sector in the year ahead, with nearly one in five (18%) to "dramatically increase investment levels", according to a new global research study by London-based Nickel Digital Asset Management.
The regulated digital assets hedge fund manager founded by alumni of Bankers Trust, Goldman Sachs and JPMorgan, found that institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $3.5trn in assets, had growing confidence in the sector in the short and longer term.
Nearly nine out of 10 (87%) believe investment opportunities in the sector are attractive on a 12-month view with 39% saying investment opportunities are very attractive. Over five years 92% say investment opportunities are attractive with 39% describing them as very attractive.
Optimism about the future builds on limited expansion in the past year, the study found. Around two out of five (38%) said their organisation had increased investment in the sector in the past 12 months with 13% dramatically increasing investment levels.
However, nearly half (49%) said they had reduced investment levels in the sector in the past 12 months. Around 7% had sold all their holdings while 13% of those questioned had dramatically reduced investment in the digital assets sector.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital said: "The strong performance of the digital assets sector year to date is reflected in the strengthening optimism by forward-looking allocators that the market has entered a sustainable recovery trend and offers an opportunity to engage."
Nickel Digital commissioned the market research company Pureprofile to interview 200 institutional investors and wealth managers across the US, UK, Germany, Singapore, Switzerland, Brazil and the UAE in July 2023.
