80% of Institutional Investors Expect Crypto to Overtake Traditional Investments, Survey Shows

April 27, 2022 Bitcoin.com

What is driving institutions to invest in crypto? BlockFi’s David Olsson explains

April 18, 2022 Coin Telegraph

Blockchain

“Out of the 80% of Top 50 hedge funds in the world we’ve spoken to, they all are embarking on some sort of crypto journey,” says Olsson.

In an interview with Cointelegraph reporter Joe Hall on April 12, David Olsson, global head of institutional distribution at BlockFi, shared his insight on the state of institutional adoption of cryptocurrencies. BlockFi is a financial services company that offers retail wealth management products such as crypto-backed loans, interest accounts, Bitcoin (BTC) rewards credit cards, etc. Meanwhile, for institutional investors, BlockFi's proprietary platform provides financing for capital efficiency, the ability to borrow coins for hedging and shorting, and institutional-grade trading infrastructure.

When asked about any exciting trends among institutional clients adopting crypto, Olsson told Cointelegraph, "Out of the 80% of Top 50 hedge funds in the world we've spoken to, they all are embarking on some sort of crypto journey, such as starting a trading desk or investing in crypto native firms run by 25 to 30-year-olds that know how to extract alpha from crypto markets and manage the risks."

"It really is a generational story. The early asset managers don't have the natural, digital native perspective of someone that's younger. But we see a tremendous amount of interest."

Olsson told Cointelegraph that hedge funds have been preparing for quite a while to venture into crypto, given the significant increase in liquidity and institutionalization of the space over the years. According to a study conducted by Fidelity last year, 70% of surveyed financial institutions plan to invest in crypto in the next year, while 90% said they plan to do so in the next five years. "Bitcoin has returned more than 100% per year on avg. over the last 10 years, compared to around 10% per year for equities in the U.S. So it's just becoming too big in terms of mindshare for people to ignore," Olsson added.

"Crypto can fix the plumbing of the financial system worldwide, starting with eliminating expensive fees from banks."

But Olsson also pointed out that some institutions don't feel 100% comfortable, as jurisdictions with high liquidity for crypto don't always have the regulation to back them. "For adoption to increase, you need an institutional infrastructure, which means KYC [Know Your Customer], AML [Anti-Money Laundering] mechanism, which means financial transparency, cyber security, all the things that clients care about."

As Cointelegraph previously reported, demand from major investors could still be running high, with 30,000 BTC moved off Coinbase on April 15.

Institutional crypto funds see largest capital inflows for 3 months

March 29, 2022 Coin Telegraph

Bitcoin investment

The data from CoinShares shows a weekly inflow of $193 million, with more than half of that figure going to Bitcoin alone. Solana is also getting attention and broke a record in the process.

CoinShares data revealed on Tuesday that institutional investments into cryptocurrencies are at the highest levels in three months, a sharp rise from the previous week which saw outflows of $47 million.

The Digital Asset Fund Flows Weekly Report revealed that investment products for digital assets saw total inflows of $193 million last week, a level not seen since early December 2021.

The last time investment levels were near the current figure was in the week ending on Dec. 3, which saw $184 million worth of inflows.

The fund flows had a big focus on Bitcoin (BTC), with just over 50% of the capital going into products based on BTC, which saw inflows totaling $98 million.

Solana (SOL) was runner-up, seeing $87 million inflows for the week, a figure that CoinShares says is the “largest single week of inflows on record.” SOL-based funds now represent 36% of assets under management with institutional firms, the largest altcoin after Ether (ETH). ETH-based funds saw inflows last week totaling just $10.2 million.

Europe was the significant contributor, with firms seemingly bolstered by the news that the bill banning proof-of-work (PoW) mining did not pass. 76% of inflows, or about $147 million, came from the region last week

The figures from the report are in sharp contrast to the data the week prior, which saw $49.4 million withdrawn from BTC and ETH from mostly North American firms with concerns regarding increasing crypto regulations.

The inflows of cash by institutional firms correlate with the price of Bitcoin seeing a recent surge above $48,500 at one point. The same was true with Ether which broke out over $3,300.

Last week, executives from crypto firms Nexo and Amber Group discussed the ”exponential” growth of institutional investment into cryptocurrencies at the Blockchain Africa Conference 2022, saying that while there‘s an increase in institutional onboarding, there might still be barriers to entry. Kalin Metodiev, co-founder and managing partner at Nexo, said most firms may claim that the crypto market is “still too volatile.”

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