The Institutional Crypto Outlook Survey, based on responses from over 200 global Binance institutional investors, provides valuable insights into their attitudes, preferences, adoption, and motivations toward cryptocurrency investments. The survey, conducted between March and May 2023, reveals that institutional investors hold a positive outlook for cryptocurrencies in the short and long term. 

Institutional investors are increasingly allocating funds to the crypto market, with a focus on infrastructure, Layer 1 (L1), and Layer 2 (L2) technologies. This article highlights the key findings of the survey, including investors' perspectives on crypto adoption, use cases, and regulatory concerns, as well as custody and trading preferences.

Concerns and trading preferences

Regulatory risk is the primary concern for institutional investors, with 29.7% of respondents highlighting it. Counterparty and custody risks follow at 21.6% and 15.7%, respectively. However, price volatility does not seem to deter institutional investors, as it is cited as a concern by only 2.8% of respondents. 

When it comes to trading, centralized exchanges (CEXes) are the preferred choice for the majority (90.5%) of institutional investors. Larger funds show a growing preference for alternative venues such as decentralized exchanges (DEXes) and over-the-counter (OTC) desks. 

Custody of crypto assets primarily rests with CEXes, with 58.2% of respondents using them. Institutional custodians such as Ceffu gain preference among funds with AUM between $50 million and $75 million.

Positive outlook and increased allocation

The survey indicates that a majority of institutional investors (63.5%) are positive about the outlook for cryptocurrencies over the next 12 months. This optimism significantly increases when considering the next decade, with an overwhelming majority (88.0%) expressing positive sentiments. Moreover, 35.6% of respondents increased their crypto allocation in the past year, while 47.1% maintained their allocation. Looking ahead, half of the investors plan to increase their allocation, with only 4.3% expecting a reduction.

Interests and adoption

Infrastructure emerges as the sector of greatest importance to institutional investors, with 53.9% highlighting it as a key area of focus. L1 and L2 technologies follow closely at 48.1% and 43.8%, respectively. In terms of usage, decentralized finance (DeFi) decentralized applications (dApps) have gained significant traction among institutional investors in recent months. Investors believe that real-world use cases and regulatory clarity will drive further crypto adoption.

Motivations for investing in crypto

The potential for a high return on investment (ROI) is considered the most compelling case for investing in cryptocurrencies by 42.8% of institutional investors. Another significant motivation, cited by 37.5% of investors, is gaining exposure to emerging technologies. Interestingly, portfolio diversification emerged as an additional motivation for investing in cryptocurrencies for funds with assets under management (AUM) above $75 million. These findings reflect institutional investors' belief in the long-term growth potential of the crypto market.

As the crypto market continues to evolve, these insights provide valuable guidance on institutional investors' sentiments and preferences, shaping the future of the industry.

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About Ceffu
Ceffu is a compliant, institutional-grade custody platform offering custody and liquidity solutions that are ISO 27001 & 27701 certified and SOC Type 1 & Type 2 attested. Its multi-party computation (MPC) technology, combined with a customizable multi-approval scheme, provides bespoke solutions allowing institutional clients to safely store and manage their digital assets. Such solutions include insured on-chain cold storage, escrow services, staking, OTC and spot trading.

Institutions also benefit from Ceffu’s secure gateway to a wide range of liquidity products within the Binance ecosystem as Binance’s institutional custody partner through Mirror, its off-exchange settlement solution.

Media contact: pr@ceffu.com 

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