39% of Canada’s institutional investors have exposure to crypto: KPMG

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Last year saw a notable rise in crypto investments among Canadian institutional investors, according to a recent report by accounting firm KPMG.

Approximately 40% of institutional investors disclosed holding crypto assets either directly or indirectly in the year 2023, marking a significant increase from the 31% reported in KPMG’s survey conducted in 2021.

Approximately 31 out of the 65 total responses came from institutional investors overseeing assets exceeding $500 million, and the remaining 34 responses were submitted by financial services entities.

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Approximately one-third of institutional investors currently hold 10% or more of their investment portfolios in cryptocurrencies, which is an increase from the one-fifth who did so two years ago.

Kunal Bhasin, a partner and head of KPMG Canada’s Digital Assets team, suggested that firms are considering investing in non-traditional assets as a protective measure against inflation and mounting US debt.

Many investors mentioned a ripe market and advanced safety measures for cryptocurrencies as significant motivators for investment. Additionally, there was a growing need identified by financial institutions to broaden their services in response to heightened client interest in crypto assets.

Canada’s groundbreaking approval of Bitcoin and Ethereum exchange-traded funds (ETFs) in February 2021 drew significant interest from local investors, according to Kareem Sadek, an executive at KPMG’s Digital Assets team.

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For some market players in Canada, the recent US approval of Bitcoin SPOT ETFs signified a significant achievement. (Sadek emphasized.)

Approximately half of the institutional investors questioned in the study hold crypto assets via Canadian ETFs, trusts, or other authorized investment channels. In contrast, a larger proportion, approximately 58%, have invested in crypto through the stock market, including companies like Galaxy Digital listed on the Toronto Stock Exchange – marking an increase from 36% in the previous year.

A larger number of institutional investors are gaining access to the market via derivatives, with a current participation rate of 42%, up from 14% in the previous year.

The only fall came from venture capital or hedge fund firms, falling to 25% from 2021’s 29%.

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2024-04-25 04:37