Evening Brief – 03.22.24
Digital Mania
Nearly nine out of ten institutional investors and wealth managers acknowledge the importance of digital assets in diverse portfolios, with half saying they should account for a moderate share of portfolios. according to a survey led by Nickel Digital Asset Management.
The survey conducted by the London-based digital assets hedge fund manager, which was founded by alumni of Bankers Trust, Goldman Sachs, and JPMorgan, suggests that digital assets are becoming more widely accepted.
Nickel’s study with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $816 billion in assets found 23% believe digital assets should only represent a small part of portfolios while 16% say they should form a significant part of portfolios.
Around 10% of those polled believed digital assets should only be used in diverse investment portfolios for certain investment strategies.
The acceptance of digital assets’ place in diverse investment portfolios demonstrates how institutional investors’ and wealth managers’ perspectives are shifting, which is reflected in projections for the introduction of new digital asset funds.
Nearly two-thirds (63%) of those polled expect a rise in the number of new funds focusing on digital assets and cryptocurrencies during the coming year, with 24% expecting a significant increase. Only 6% predict a minor reduction in the number of funds during the next 12 months.
The proof can also be quantified by the consistent inflows. CoinShares reported that institutions poured in a new weekly record of $2.9 billion into crypto investment products last week in the seventh consecutive week of inflows.
In its latest Digital Asset Fund Flows report, the digital assets manager said that year-to-date inflows for crypto investment products have also reached a new record mark.
“This week’s inflows have pushed year-to-date inflows to $13.2 billion, smashing the full 2021 inflows of $10.6 billion. During the week global ETFs broke the $100 billion mark for the first time, although the price correction at the end of the week saw it settle at $97 billion.”
Coinshares also noted that as usual, Bitcoin products enjoyed the lion’s share of inflows at $2.86 billion.
Nickel’s Anatoly Crachilov, CEO and Founding Partner, added, “The recent strong performance of digital assets highlights the role they can play in diversified investment portfolios, underlining the renewed interest in the asset class from institutional investors and wealth managers.
We have no doubt that the SEC’s approval of Spot Bitcoin ETFs has played a role in the acceptance of digital assets as the barriers of inclusion have been dramatically lowered.”