A recent study revealed some intriguing insights regarding a bullish sentiment on cryptocurrencies among asset management institutions, even amidst uncertain regulatory environments. The study, conducted by Coalition Greenwich and Amberdata, indicates that approximately 48% of financial institutions in the UK, Europe, and the US currently offer digital asset services to their clients, a trend that is expected to grow. This is despite a bearish market outlook and the regulatory ambiguity in the US in particular.
Sean Douglass, CEO of Amberdata, noted an interesting point that most firms remain positive about the potential for digital asset adoption in the states, even despite what some might interpret as a harsh stance from the Securities and Exchange Commission (SEC). The SEC’s renewed regulatory scrutiny has led to disputes with numerous Web3 firms, yet asset managers continue to view the US market as a goldmine.
However, it’s not all rosy on the institutional side. The approximately 52% of institutions who are not offering crypto-services often cite regulatory barriers as a primary reason. These concerns include the essential nature of cryptocurrencies, unclear tax regulations, security concerns, and Know-Your-Customer (KYC) issues.
Despite these challenges, the institutional demand for digital assets has experienced a resurgence this year, fuelled in part by the potential approval of a spot Bitcoin Exchange-Traded Fund (ETF) by the SEC. Indeed, a point underscored by asset managers in the survey is an optimistic forecast for the overall market to grow within the next five years. In terms of regulations, a whopping 85% of institutions say they anticipate a softer stance from the SEC, creating more positive opportunities for digital assets in the years to come.
In the interest of a fair analysis, the survey included a broad distribution of digital asset holdings among institutions. 22% of firms reported assets under management ranging from $1-$10 million, with another 19% logging between $11 million- $50 million.
A significant finding was the growing interest in decentralized finance (DeFi) products among institutions. While these firms began with traditional services such as trading and investing, the shift towards embracing DeFi illustrates a continually evolving dynamic as institutions explore further embracing the crypto frontier.
Source: Cryptonews
