Despite the market is 60% below its all-time highs (ATH), institutional interest in cryptocurrencies hasn’t changed, and it’s evident institutions are extremely interested in crypto ETFs, although buying has been diminishing, according to the plurality of asset managers who said they are “very interested” in Exchange Traded Funds with a cryptocurrency theme (ETFs).
A survey by Brown Brothers Harriman shows global interest
The 2023 Global ETF Investor Survey was published by financial services company Brown Brothers Harriman (BBH) on April 3. It surveyed 325 institutional investors, financial advisors, and fund managers from the US, UK, Europe, and China.
A majority of institutions are extremely interested in crypto ETFs alongside investors—nearly three-quarters—said they were “very” or “very” interested in crypto ETFs, but the impacts of the “crypto winter” seem to have dampened their enthusiasm. Just a quarter stated they’re planning to boost allocation to crypto ETFs during the next 12 months, a 6% reduction from 2022.
Despite a turbulent year for cryptocurrencies, enthusiasm hasn’t completely subsided
Although some investors have lowered their priority for crypto-themed ETFs, nearly half still intend to diversify their investment portfolios this year by adding crypto ETFs. Till now, institutions have been extremely interested in crypto ETFs.
According to BBH, fund managers are starting to become used to the expected volatility in the cryptocurrency market, which is contributing to the increase in interest in crypto ETFs.
Investors are widening their portfolios and incorporating more cutting-edge items as a response to volatility. Despite a turbulent year for cryptocurrencies, enthusiasm hasn’t completely subsided.
Looking for the pathways
The desire for associated ETF exposure will rise further, according to BBH, as a better regulatory environment for cryptocurrencies would make doing business with the industry more “comfortable.” Almost 40% of respondents stated that they managed assets worth more than $1 billion, and more than half said that they had more than 25% of their portfolios in ETFs.
Not all cryptocurrency ETFs have done well; as a result of the crypto market cold, BetaShares Crypto Innovators ETF (CRYP) and Cosmos Global Digital Miners Access ETF (DIGA), both of Australia, have had the worst performances of all the countries ETFs. The Bitwise 10 Crypto Index Fund and ProShares Bitcoin Strategy (BITO), both traded on the NYSE, are two of the biggest cryptocurrency exchange-traded funds (ETFs) (BITW). According to reports, BITO was the first bitcoin-related ETF to be introduced in the US, while BITW monitors the top 10 most valuable cryptocurrencies by market capitalization.
As a consequence, DIGA was delisted at the end of 2022 along with Cosmos Purpose Ethereum Access ETF (CPET) and Cosmos Purpose Bitcoin Access ETF (CBTC).
Also Read: Bitcoin defies Regulatory Pressure and is untouchable says analysts.
