A new survey of institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who don’t currently have exposure to cryptocurrencies and digital assets, reveals 62 per cent expect to invest in these for the first time within the next year, though most will be conservative with their initial forays
Results of the survey by Nickel Digital Asset Management suggest the main reason given for investing in digital assets for the first time is the long-term capital growth prospects of cryptocurrencies and digital assets – the view cited by 47 per cent of respondents. This is followed by 44 per cent who said it is because more corporates and fund managers are investing in cryptocurrencies, which gives them greater confidence in the asset class, and 41 per cent who said it is because the regulatory environment is improving. One in three (34 per cent) said it is because it is a good hedge against inflation.
“There is no doubt that the cryptoassets market is becoming more mainstream in the institutional and wealth management sectors,” Nickel Digital head of Business Development Henry Howell said. “This is being driven by several factors including strong market performance during the COVID crisis, more established investors and corporations endorsing the market, and the sector’s infrastructure and regulatory framework improving.
“As these trends continue to evolve, this will fuel further growth in the market from professional and sophisticated investors.”
Nickel has four funds investing in the digital asset space. Its market-neutral Digital Asset Arbitrage Fund pursues an absolute return strategy without expressing directional views on the underlying cryptoassets market. It seeks to exploit market inefficiencies and price dislocations and harnesses swings of volatility to deliver consistent positive returns within a strictly defined risk management framework. Since its debut 27 months ago, the fund has seen 96 per cent positive months and is up 12.6% YTD.
Diversified Alpha Fund is a non-directional multi-strategy multi-manager fund that wraps a portfolio of attractive but hard-to-access and capacity-constrained strategies into a single, investible fund. Among the strategies it deploys are high-frequency market-making, statistical arbitrage, relative value, volatility arbitrage, and trend following.
DeFi Liquid Venture Fund is designed to capture the growth potential of the broader digital assets space outside Bitcoin, spotting early winners in Layer 1 protocols and DeFi. The fund is an actively managed research-driven vehicle aiming at identifying early winners and capturing the structural expansion of this space. The portfolio was up more than 30 per cent in August.
Nickel’s Digital Gold Institutional Fund, a Bitcoin tracker, provides liquid access to physically allocated Bitcoin. It delivers institutional-grade precision of trade execution available seven days a week.