In 2023, close to 40% of institutional investors ventured into crypto assets, marking a notable surge from the 31% recorded in 2021, as revealed by a recent survey jointly conducted by KPMG in Canada and the Canadian Association of Alternative Assets & Strategies. The study underscores a significant uptick in institutional interest in cryptocurrencies, with a third of respondents indicating a portfolio allocation of at least 10% to crypto assets, compared to a fifth reported two years prior.
A primary driver behind this growing enthusiasm among institutional investors for cryptocurrencies is the perceived maturation of the market and improvements in custody infrastructure, cited by 67% of respondents—an impressive increase from the mere 14% recorded in 2021. Additionally, 58% of respondents pointed to the robust market performance of cryptocurrencies as a compelling factor influencing their investment decisions.
The surging performance of leading cryptocurrencies like Bitcoin and Ethereum has undoubtedly contributed to this heightened interest. Bitcoin, the foremost cryptocurrency by market capitalization, witnessed a remarkable 150% surge in 2023 and a nearly 60% increase year-to-date. Similarly, Ethereum, the second-largest cryptocurrency, saw a notable rise of approximately 60% in 2024.
The approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January of 2023 has also played a pivotal role in expanding institutional access to the crypto asset class. After a series of unsuccessful applications, the SEC’s decision has facilitated easier inclusion of cryptocurrencies in institutional portfolios.
Moreover, a recent survey conducted by the Digital Assets Council of Financial Professionals indicates a sharp rise in financial advisers intending to recommend crypto-related opportunities to their clients—35% of respondents plan to advocate for crypto investments, compared to 21% at the close of the previous year. This burgeoning interest in cryptocurrencies has prompted major sell-side firms like JPMorgan and AllianceBernstein to broaden their research coverage of digital assets, fostering more nuanced conversations between investor relations (IR) professionals and institutional investors.
In Hong Kong, the surge in institutional and retail investor interest in cryptocurrencies mirrors global trends, driven by regulatory clarity and the recent approvals of Bitcoin and Ethereum spot ETFs. OSL Group, a Hong Kong-listed digital assets company, has experienced a notable increase in investor interest, prompting a proactive shift in their investor relations approach. Hong Kong’s launch of its inaugural batch of cryptocurrency-focused ETFs further underscores the region’s growing prominence in the crypto investment landscape, introducing potential competition for similar products in the United States.
