36% of Institutional Investors Included Crypto In Their Portfolios In 2023

In the intricate landscape of institutional investments, the year 2023 witnessed a cautious foray into the world of cryptocurrencies. Recent data from Stocklytics.com reveals that a mere 36% of institutional investors chose to build up their crypto holdings in 2023.

Contrary to optimistic narratives of crypto maturation and growing interest, the reluctance of institutional investors to fully integrate crypto assets reveals a deeper unease within the financial sector.

Apprehension surrounds the purported astounding growth of the industry, as concerns regarding the inherent risks and uncertainties associated with crypto remain unresolved.

Edith Reads, a financial analyst at Stocklytics, remarks:

Despite the industry experiencing remarkable growth, concerns surrounding crypto investments persist. This shift from the previous year signifies a prudent approach even as the asset class is purportedly maturing and prominent asset managers are redoubling their efforts to expand ownership through spot Exchange Traded Funds (ETFs).

Stocklytics financial expert, Edith Reads

Institutional Investment in 2024

Unfortunately, geopolitical anxieties are at the vanguard of the recently welcomed year. The ongoing Russia-Ukraine invasion and the Israel-Hamas war pose alarming tumults to the global economy in 2024. 

Moreover, about 64 countries are having their elections in 2024,  the highest number of countries in history. The polls and the incessant wars are spurring an atmosphere full of tension and uncertainty for investors. As a result, institutional investors are looking into alternative asset allocations.

This year Investors will focus more on private equities and debts, with 39% and 45%, respectively,  projected to add their holdings. 51% will retain their gold investments and a significant 30% hope to increase their assets. Real estate also holds a substantial share of popularity in 2024, with 29% seeking to add more to their portfolios.

14% consider adding to their crypto assets, and 9% are inclined towards hedge funds. However,  a staggering 30% wish to lower their crypto assets in 2024, highlighting the risks in investing in cryptocurrencies.

Why is Crypto’s Image Falling Short Among Investors?

The regulatory vacuum in the crypto space is turning away potential investors. Nearly 60% agree that instilling guidelines for the sector would augment its appeal.  The lack of scrutiny has sucked in criminals into the industry targeting unsuspecting crypto miners. Therefore, institutional investors are wary of fraud and asset theft risks.

On the flip side, numerous institutional investors primarily recognize the value of blockchain technology and regard it highly. Notably, 82% consider blockchain technology as the true innovation. However, a majority overlook the potential of crypto assets and are only partially drawn to the underlying technology.