Crypto Asset Management: Nearly Half Of Institutions Embrace Digital Assets – Report

A recent study has revealed that the cryptocurrency markets in the United States and Europe remain remarkably robust and are making significant progress, despite facing intense scrutiny and uncertainty in the US market.

According to research conducted by Coalition Greenwich and Amberdata, asset managers and hedge funds are increasingly exuding optimism and fervor when it comes to the burgeoning potential within the cryptocurrency asset class.

They are not only enthusiastic about the prospects of growth but are also actively exploring and capitalizing on the manifold commercial opportunities that this space has to offer.

In this dynamic landscape, these financial professionals see the cryptocurrency asset class as a fertile ground for expanding their portfolios and diversifying their investments. They are not merely spectators; instead, they are actively positioning themselves to leverage the growth trajectory of cryptocurrencies.

Crypto Adoption On The Rise

The research conducted by Coalition Greenwich, a renowned global leader in strategic benchmarking, analytics, and insights for the financial services sector, in collaboration with Amberdata, a prominent blockchain and cryptoasset data firm, has revealed a significant trend: their findings indicate that a substantial 48% of asset management institutions are proactively overseeing cryptocurrency assets on behalf of their clients.

Surprisingly, these institutions maintain a positive and optimistic outlook on cryptocurrencies, even in the face of a generally bearish market sentiment.

The study, titled “Digital Assets: Managers Fuel Data Infrastructure Needs,” sought to examine how these institutions are incorporating digital asset services into their offerings, including client interactions, investment products, and related technologies, to meet the demands of their clients.

Based on the study, 24% of asset management firms have implemented a strategy for digital assets, and an additional 13% intend to do so within the next two years.

The data also reveals that a survey was conducted on 60 companies spanning three jurisdictions, and 25% of them currently possess digital asset managers and related teams. It is anticipated that this percentage will increase by a third in the coming 12 months as more firms express interest in expanding their capacity in this area.

More Countries Explore Digital Assets

Meanwhile, the crypto market remains robust, supported by hubs in Dubai, Singapore, Switzerland, the US, and the United Kingdom. Financial institutions are exploring asset tokenization, while a well-regulated custody infrastructure is essential.

The competitive landscape is shifting towards data, analytics, and tools for front-office professionals seeking higher returns. Over the next 6-12 months, increased investments are expected in crypto data and portfolio management, indicating industry readiness for future opportunities, the study finds.

Among the institutions that do not provide crypto services, 52% attribute their stance to regulatory challenges. These entities point to various factors, such as the unique characteristics of cryptocurrencies, ambiguous tax regulations, security apprehensions, and issues related to Know Your Customer (KYC) compliance.

Asset managers anticipate a growth in the overall market for the next five years, a viewpoint that aligns with previous observations made by digital asset executives. Regarding regulations, 85% of institutional respondents hold the belief that the US Securities and Exchange Commission will shift away from its strict approach and foster more favorable opportunities in the coming years, the study shows.

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