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.
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.
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