Binance survey finds 50% institutional investors plan to increase crypto allocation

Rick Steves

Unsurprisingly, the main concerns of survey participants are regulatory risk (29.7%), counterparty risk (21.6%), custody of assets (15.7%), and macroeconomic risk (10.6%). 

Binance Research, the crypto exchange’s subsidiary that focuses on providing institutional-grade analysis, in-depth insights, and unbiased information, has released the Institutional Crypto Outlook Survey.

The study, which was jointly made with Binance VIP & Institutional – a provider of an optimized digital asset trading experience for hedge funds, asset managers, family offices, proprietary trading firms, market markets, and brokers, found that 47.1% of institutional investors maintained their crypto allocation over the past year and over a third (35.6%) increased their allocation in the same period.

Half of the institutional holders of crypto assets expect to increase their allocation, with only 4.3% expecting to reduce allocation to crypto in the next 12 months.

63.5% have positive outlook for next 12 months

Consisting of insights generated from 208 global institutional investors, the report authored by JieXuan Chua, CFA, Shivam Sharma, and Colin Chan, found that 63.5% of respondents indicated that they are positive about the outlook of crypto over the next 12 months.

When asked about their outlook for the next decade, investor optimism rose to an overwhelming majority of 88.0%.

The report also noted that infrastructure is the most important sector for institutional investors or their funds, with 53.9% checking infrastructure at the top of their choice, closely followed by L1 and L2 sectors at 48.1% and 43.8% respectively.

The study also concluded that intraday strategies (44.7%) are the most commonly cited by institutional investors. Potential ROI (42.8%) and exposure to technology (37.5%) were the main reasons to enter the crypto space.

Regulatory risk is main concern among institutional investors

Unsurprisingly, the main concerns of survey participants are regulatory risk (29.7%), counterparty risk (21.6%), custody of assets (15.7%), and macroeconomic risk (10.6%).

Additionally, institutional investors largely trade on centralized exchanges (90.5%) and 58.2% store the bulk of their assets on CEXs, with only 20.2% storing on institutional custodians, and 14.9% on self-custodial cold wallets.

Liquidity is the most important trait for institutional investors when evaluating a centralized exchange for their trading needs. This is understandable, given that institutional investors tend to trade in larger sizes. Security and reputation were also key traits when choosing their CEXs.

Social media (65.4%) is the main source of information and news about the crypto space among institutional participants. This is followed by crypto news outlets (50%) and industry professionals (39.9%).

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