According to a report from Institutional Investor, crypto investors have continued to add to their crypto allocation despite the crypto winter and plan to add more in the next three years. Survey findings show continued growth and interest among investors. 62% of investors who have crypto exposure increased their positions in the last 12 months and 58% expect to increase their allocations over the next three years.
Investors believe that crypto is here to stay and are taking a long-term view. Institutional adoption is now firmly entrenched with 72% of institutional investors acknowledging that digital assets are here to stay. While the majority of investors (83%) expect crypto prices to remain range bound or trend lower in the next 12 months, 71% see asset valuations increasing over the long term.
Reasons for investing in the asset class are evolving. Investors pointed to the goal to improve funded status, access yield opportunities, invest in innovative technology, and potential for long-term appreciation, as main reasons for investing in the asset class. This is a departure from past studies in which having low correlation with other asset classes and being a hedge against inflation were more prominent factors.
The survey also highlighted the need for regulatory clarity – from crypto intenders and those who are actively invested in the space. It was true during the survey period (prior to the FTX bankruptcy) and is likely even more true today.