Achi news desk-
Investing in cryptocurrencies is picking up steam, according to a new survey, even in the face of potential volatility and a massive fraud that has been exposed.
According to the survey by KPMG, released on Wednesday, 22 percent more financial services institutions offered “cryptoasset products” and services to clients in 2023 than in 2021, while 26 percent more institutional investors included cryptoassets in their portfolio within the same timeframe. .
Half of respondents in financial services said their organizations were actively offering at least one type of cryptoasset product or service to clients, up from 41 percent in 2021, and 39 percent of institutional investors said they were exposed directly or indirectly with cryptoassets, up from 31 percent in 2021.
Among institutional investors, 75 percent said they own cryptoassets directly, up from 29 percent in 2021.
The survey received responses from 65 entities, of which 31 were institutional investors, such as hedge funds, pension funds, high net worth individuals and venture capital firms, while 34 were financial services organisations.
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Financial services institutions have increased their crypto offerings, according to the survey, and had an average of two to three services in 2023 compared to one to two services in 2021. Eighty percent said client demand for cryptoasset services was a factor great in expanding offerings.
Kunal Bhasin, a partner at KPMG who specializes in cryptoassets, told Global News that the growing demand for cryptocurrencies is mainly coming from institutional investors who are looking to get into the asset for the long term rather than making quick money. He said that from what he has seen, the clients are the ones who insist on participating in cryptocurrencies.
That could be due to the increasing value of cryptocurrencies such as Bitcoin, which has seen significant volatility in its price but has also seen its price rise 150 percent in 2023 and is up 50 percent so far in 2024, according to KPMG.
According to the survey, 67 percent of investors said that the maturing crypto market and the security measures in place for digital assets have been key reasons they first invested in cryptoassets, and 58 percent said their participation was due to strong market performance.
The increased participation in cryptocurrencies comes after the industry saw major changes due to an uncovered fraud, Sam Bankman-Fried’s crypto-trading platform. Bankman-Fried was convicted of stealing more than $8 billion from customers and was sentenced to 25 years in prison in March.
Bhasin said the industry has emerged stronger from the scandal and that new risk management frameworks and strategies have been included in dealing with the commodity.
He said major institutions took a step back after the fraud was exposed, but now they are back in the game and their participation has given crypto a sense of maturity that has encouraged others to join as well.
“These incidents have had a cleansing effect and people are starting to call these types of fraud a lot more in advance whenever they see something like this happening,” he said. “Crypto is not going away.”
& copy 2024 Global News, a division of Corus Entertainment Inc.
