- While digital assets gain mainstream acceptance, institutional investors and wealth managers continue to have concerns.
- At the top of the list is crypto security, according to Nickel Digital Asset Management.
- Other concerns include price volatility and regulatory uncertainty.
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While digital assets gain mainstream acceptance, institutional investors and wealth managers continue to have concerns.
At the top of the list is crypto security, which trumped regulatory uncertainty and price volatility, according to a report commissioned by Nickel Digital Asset Management that was first reported by Bloomberg.
After interviewing 50 wealth managers and 50 institutional investors across the US, the UK, Germany, France, and the United Arab Emirates who collectively manage around $108.4 billion in assets, here are their top four concerns:
- 79% cited asset security as the main consideration
- 67% expressed a level of price apprehension in volatile price swings
- 56% said it was the market capitalization
- 49% said it was the regulatory uncertainty
"Our research shows that institutional investors have correctly identified custody and security as a critical differentiator to this unique asset class," said Henry Howell, head of business development at Nickel Digital.
Meanwhile, just 12% said they were concerned about the carbon footprint from crypto, which requires massive amounts of energy for servers to process transactions and mine new tokens.
Nickel Digital, Europe's largest regulated digital-asset hedge fund manager, also said 76% of its survey respondents were optimistic Gary Gensler, chair of the US Securities and Exchange Commission, will be able to get Congress to provide his agency with more authority to govern digital assets by next year.
"If the SEC is granted these extra powers, 73% of institutional investors and wealth managers believe this will have a positive impact on the price of crypto and digital assets -- 32% believe it will have a very positive effect," the study said.
Gensler, who taught a crypto course at MIT, has said he was neutral or even intrigued by the technology but was not neutral about investor protection. He also said he believed digital assets could boost economic progress and become more widely used.