• Institutional interest in crypto ETFs remains high, according to the 2023 Global ETF Investor Survey by Brown Brothers Harriman (BBH).
• Nearly three-quarters of institutional investors stated they’re „extremely“ or „very“ interested in crypto ETFs.
• A clearer cryptocurrency regulatory framework could increase demand for such ETF exposure.
Institutional Interest In Crypto ETFs
The financial services firm Brown Brothers Harriman (BBH) recently released its 2023 Global ETF Investor Survey which revealed that institutional interest in cryptocurrencies hasn’t waned despite the market being 60% lower than its all-time highs. Over 40% of respondents said they handle assets worth more than $1 billion, and more than half said they invest more than a quarter of their portfolio in ETFs. Nearly three-quarters of institutional investors stated they’re „extremely“ or „very“ interested in crypto ETFs.
Interest Not Waned Despite Volatility
Despite a turbulent year in crypto, interest has not waned. Investors are diversifying their portfolios and adding more innovative products as they adjust to volatility. 48% of investors still intend to add cryptocurrency and digital asset-themed ETFs to their portfolios this year in order to diversify their investments. However, only a quarter of respondents expect to increase their allocation to ETFs with cryptocurrency exposure, compared to 33% in 2022.
Regulatory Framework Could Increase Demand
The report adds that a clearer crypto regulatory framework, such as the European Union’s Markets in Crypto Assets (MiCA) proposal, will increase demand for such ETF exposure by providing a safety net when doing business with the crypto sector. Shawn McNinch, Global ETF Head at BBH noted that people are looking at crypto ETFs as a possible opportunity and because of the volatility in that asset class; it’s not for everyone.
Survey Overview
The survey included 325 institutional investors, financial advisers, and fund managers from the US, UK, Europe, and China. The survey asked questions about the current level of investor interest related to cryptocurrency Exchange Traded Funds (ETFs).
Conclusion
Overall, it is clear that institutional investors remain interested in investing into cryptocurrency Exchange Traded Funds despite some volatility throughout the year; however due to increased regulation surrounding cryptocurrencies there may be an increased demand for these type of funds moving forward which could lead to further investment into this space from institutions around the world