The nebulous regulatory backdrop and sluggish cryptocurrency markets aren’t fazing asset managers’ fascination with digital assets. According to a survey conducted by Coalition Greenwich, an arm of the India-based credit rating firm Crisil, and crypto data supplier Amberdata, nearly 50% of the 60 professionals from American and European-based asset management and hedge funds they polled are active digital asset managers. The figures presented in the ‘Digital Assets: Managers Fuel Data Infrastructure Needs’ underline the growing enthusiasm within the industry, suggesting favourable prospects for digital assets in the next half-decade.
Given these findings, it is observed that an optimistic vision of the digital asset industry’s future is reflected in the asset management community. An astounding 40% of managers anticipate a piled annual growth rate of at least 11% in the industry, with closer to a fifth envisaging gains of 20% or more. The confidence doesn’t rest here. An impressive quarter of these firms reportedly have a distinct digital assets strategy on board, with an additional 13% intending to debut a similar strategic plan within the coming couple of years.
The survey reveals an interesting perspective on potential product offerings, suggesting that asset managers could see commercial opportunities in areas like ETFs and tokenized securities. Moreover, the American regulatory environment, although still murky, is viewed in a positive light by asset managers, expecting prudent legal frameworks for the industry in future. This optimism persists despite the Securities and Exchange Commission’s enforcement moves against leading crypto exchanges Binance and Coinbase.
Remarkably, managers predict an escalated growth in centralized exchanges over the next five years. This precedes the collapse of Sam Bankman-Fried’s crypto exchange FTX in November last year; proving a shift in investor preference towards direct custody of their coins and away from centralized exchanges.
While digital assets are still in an evolutionary phase, asset managers are seemingly bullish about the technology’s potential. Adoption of crypto portfolios, investment products, and tokenization of financial instruments are seen as promising use-cases for the future of this technology. Despite the challenges and uncertainties, asset managers’ strong optimism seems to suggest they are backing these digital horses for the long run.
Source: Coindesk
