Professional investors plan to increase digital assets

15 per cent of professional investors believe that more than 10 per cent of their portfolios will be held in digital assets in the long term.

This might include cryptocurrencies and tokenised investment vehicles, as well as some types of peer-to-peer lending.

According to a survey of institutional investors and wealth managers by Nickel Digital Asset Management, digital assets are set to become a mainstay of professional investor portfolios within the coming years.

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38 per cent of the survey respondents – who collectively manage around $110bn in assets – said that they expect the funds they help run to have between five per cent and 10 per cent held in digital assets over the long term. 26 per cent believe the figure will be between three per cent and five percent, and one in five (19 per cent) expect it to be between one and three per cent.

Furthermore, 90 per cent of the institutional investors and wealth managers surveyed agreed that all professional investors should maintain a small allocation to digital assets in their portfolios.

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“Our analysis of a statistically significant nine-year period reveals an asymmetric positive impact of a single-digit allocation of crypto assets to institutional portfolios, as such allocation strongly improves risk-adjusted returns, without compromising risk framework of the underlying portfolio,” said Anatoly Crachilov, chief executive and founding partner of Nickel Digital.

“It comes as no surprise that long-term institutional allocators are contemplating allocation to digital assets as part of their portfolio construction.”

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