Study Reveals Almost Half of Institutions Offer Digital Asset Services

Study Reveals Almost Half of Institutions Offer Digital Asset Services

Nearly 50% of asset management institutions in the US, UK, and Europe offer digital asset services despite regulatory challenges.

Key Points

  • A survey by Coalition Greenwich and Amberdata found nearly 50% of asset management institutions in the US, UK, and Europe offer digital asset services.
  • Despite regulatory uncertainty, many executives, particularly in the US, remain bullish on digital assets. However, 52% of institutions avoid crypto services due to regulatory hurdles.
  • Institutional investors show renewed interest, driven by potential SEC approval of a spot Bitcoin ETF.
  • Expectations of overall market growth over the next five years and a growing interest in DeFi products among institutions were also revealed.

A recent survey conducted by Coalition Greenwich and Amberdata has found that nearly half of asset management institutions in the United States, UK, and Europe offer digital asset services to their clients. The study, titled “Digital Assets: Managers Fuel Data Infrastructure Needs,” aimed to understand how institutions implement these services, user interaction and investment needs, and affiliated technologies.

The research involved surveying 60 companies across the three jurisdictions, with 25% having digital asset managers and related teams. The report predicts that this figure will increase by a third as more firms are interested in expanding their capacity in the next year.

Executives Remain Bullish Despite Regulatory Uncertainty

One interesting finding was that despite regulatory uncertainty, most executives maintain a bullish stance on digital assets, particularly in the United States. Even though the Securities and Exchange Commission (SEC) has taken a hard stance on digital assets, leading to several lawsuits with Web3 firms, asset managers see the US market as a lucrative opportunity.

Shawn Douglass, the CEO of Amberdata, stated, “It is interesting to see that the respondents were so bullish on the U.S., positively supporting digital asset adoption, despite the lack of a clear regulatory environment.”

On the other hand, 52% of institutions do not offer crypto services due to various regulatory hurdles. These include concerns about the nature of cryptocurrencies, unclear tax regulations, security issues, and KYC compliance.

Institutional Investors Remain Bullish on Crypto

This year, institutional investors have shown a renewed interest in the market, driven by the potential approval of a spot Bitcoin (BTC) ETF by the SEC. BlackRock’s ETF application, along with other big investors applying for their spot ETFs, pushed the price of BTC slightly above $31,000.

The survey also revealed that asset managers expect the overall market to grow over the next five years, aligning with the observations of digital asset executives in the past. They also anticipate centralized exchanges to continue growing despite the recent collapse of FTX.

Concluding Thoughts

Regarding regulations, 85% of institutions believe that the SEC will adopt a more positive approach in the future, reducing its harsh stance and creating more opportunities.

The survey’s respondents had a fair distribution of digital asset holdings, allowing for a comprehensive analysis of the market. Around 22% of firms reported managing assets worth $1-$10 million, while 19% managed assets between $11 million and $50 million.

Furthermore, the study found a growing interest among institutions in decentralized finance (DeFi) products, indicating a shift from traditional services like trading and investing.