Evening Brief – 09.12.23
Asset Managers Want Crypto
This is according to Amberdata, a crypto data provider that collaborated with global financial services analyst Coalition Greenwich to investigate how asset managers are adopting digital assets.
Overall, the research shows asset managers and hedge funds are optimistic about the growth opportunity of the digital asset class as well as the commercial opportunity to manage more diverse portfolios and build new investment products.
Their results from 60 asset managers who participated in the Digital holdings: Managers Fuel Data Infrastructure Needs survey revealed that a significant 48% of asset management firms are proactively supervising cryptocurrency holdings for clients. Even in the face of generally unfavorable market mood, these institutions maintain a constructive and hopeful stance on cryptocurrencies.
Three-quarters of managers anticipate an increase in digital assets under management over the next five years. Over 40% expect the industry to increase by 11%-20%.
According to the report, 25% of asset management firms have implemented a digital asset strategy, with another 13% planning to do so within the next two years.
According to the research, 85% of respondents believe that “despite near-term challenges,” the SEC and CFTC will provide opportunities to move forward.
“It’s clear from the research that there is significant and growing institutional commitment to digital assets, and an ongoing need for digital asset data, analytics, and insights to fuel their success in the asset class,” noted Shawn Douglass, co-founder and CEO of Amberdata.
Active and passive funds, arbitrage, and venture capital strategies are part of the firms’ investments. ETFS, stablecoins, and cryptocurrencies are the most popular instruments, with new tokenized securities and real-world assets being introduced.
Meanwhile, 52% of institutions who do not provide crypto services blame it on regulatory constraints. These businesses point to a variety of considerations, including the unique properties of cryptocurrencies, confusing tax legislation, security concerns, and Know Your Customer (KYC) compliance challenges.
Evening Brief: a significant 48% of asset management firms are proactively supervising crypto holdings for clients...