62% of institutional investors from the United States, Europe and the Middle East will start investing in Bitcoin and other cryptocurrencies as of 2022. This was determined by a survey conducted by Nickel Digital Asset Management, the investment manager based in London.
Meanwhile, a new study by Chainalysis found that Europe has become the economy that trades the most in crypto assets in the world. The European continent reached a trillion dollars in transactions, according to the investigation.
Nickei’s institutional crypto investment expectations survey was conducted online in the months of May and June of this year. It included 50 wealth managers and 50 other institutional investors in the US, Germany, France, the UK and the United Arab Emirates.
Why do investors want to invest in cryptocurrencies?
The study established that the main reason for 47% of institutional investors to invest in crypto assets, is the search for a long-term capital increase. Another 44% of those surveyed responded feeling motivated to invest in cryptocurrencies by the growing confidence in this type of assets by companies and fund managers.
44% of those interviewed also said they were willing to invest in cryptocurrencies for the first time after the improvement observed in the regulatory environment . Meanwhile, 34% felt that cryptocurrencies offer a good hedge to protect against inflation.
The inflation phenomenon is currently affecting Europeans and Americans equally. The 19 euro zone countries saw annual inflation jump to 3% in August 2021. Compared to 2.2% which was recorded in July, as a consequence of the rise in fuel prices.
Institutional accumulation of crypto asset holdings
According to Henry Howell, Head of Business Development at Nickel, “There is no doubt that the crypto asset market is becoming more common in the institutional and wealth management sectors.”
The executive indicated that the growing institutional adoption of cryptocurrencies is stimulated by several factors. He mentioned the strong performance and expansion of the digital currency market during the pandemic crisis.
Likewise, he cited the increase in corporate participation, the improvement of infrastructure and the growing regulatory framework of the crypto industry globally.
This survey does not but to confirm the data thrown by other similar studies that they have already done. A report prepared by the digital asset manager CoinShares, noted that until mid-September and for five consecutive weeks, institutions have been accumulating more holdings of crypto assets .
According to another survey published in July by Nickel, there were three the main reasons why institutional investors did not acquire cryptocurrencies. The security of crypto custody services, along with the poor regulation and volatility of cryptocurrencies.
Europe is the world’s leading crypto economy
On the other hand, the region of Central, Northern and Western Europe (CNWE in English), has become the most active ecosystem of digital assets globally. An investigation by the blockchain analytics company, Chainalysis, confirmed that in 2020 this region moved more than a trillion dollars in cryptocurrencies.
The report published this week specified that only in this region of Europe around 25% of all cryptocurrency trade in the world was traded between July 2020 and June 2021.
In this region there was a vertiginous increase in the volume of transactions in all subcategories of the crypto industry. Particularly with greater emphasis on the decentralized finance (DeFi) market.
The blockchain data platform, qualifies all activities as crypto asset transactions trade, investment and business involving cryptocurrencies.
The European region has also promoted institutional investments strongly in the last year and a half. Transaction values in this sub-category grew tremendously, reaching $ 46.3 billion in June 2021.
United Kingdom the country that carries out the most transactions
But the largest increase was recorded this year, as in July 2020 it was only 1.4 billion. Of all the countries included in the research, the UK was found to be the largest crypto economy in this region.
The country carried out transactions for 170 billion dollars. 49% of cryptocurrency trading was done through DeFi protocols.
The The gigantic growth of the global cryptocurrency market was favored this year by several aspects. First, the spectacular rally in Bitcoin, then the development and expansion of rival smart contract platforms and the DeFi boom.
The highest peak of the commercial activity of cryptocurrencies in the CNWE region was in May. During this month, most digital assets gained ground thanks to the bullish streak that continued until China increased the crackdown on BTC and other cryptos. That month, BTC traded up to US $ 64,000.
The results of the study Chainalysis showed that the world’s large institutional investors are driving the adoption of private digital currencies at an accelerated rate.
The adoption of cryptocurrencies grows in emerging economies
As they invest in crypto assets, confidence about these new investment options gain confidence in the market. Wealth managers, family offices and institutional investment funds are investing billions of dollars in various products.
The most favored coins are BTC and Ethereum (ETH) offered by Grayscale, 21Shares, CoinShares , among others.
Chainalysis research has shown how the adoption of cryptocurrencies is growing not only in the least developed countries, but in emerging economies and in the OECD countries themselves.
According to this year’s Chainalysis Global Cryptocurrency Adoption Index, Vietnam, India and Pakistan are the leaders in the use of digital currencies. The index is based on the value received on-chain, the volume of peer-to-peer trade and retail transactions.
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