Discover how investors are engaging with the crypto market today in this excerpt of Sygnum’s Future Finance Report 2024 – Institutional crypto market survey, covering their risk appetite, current crypto asset types, and future crypto allocation plans. Download the full report to get the complete story.
How would you describe your crypto asset risk appetite?
- 63 percent of respondents have a high-risk appetite for crypto assets, indicating that most crypto-activated respondents are generally more comfortable with its volatility. Meanwhile, 28 percent exhibit a more guarded interest, aiming for exposure with a neutral stance.
- Among the 17 percent not currently investing in crypto, most lean towards a neutral-to-low risk tolerance, often citing issues such as a lack of trust and asset volatility. Over a quarter are open to making a future allocation, while half remain undecided, and 20 percent have no plans to invest at all. This may indicate a more conservative approach to market engagement, or possibly a current basic understanding of the crypto asset class.
- Compared to last year’s data (2023), investors show an unwavering risk appetite overall. The percentage of respondents who expressed an appetite for high or very high risk actually increased in 2024.
What type of crypto assets do you currently invest in?
- 91 percent of respondents invest in blockchain protocol tokens (such as Bitcoin and Ethereum). This reflects an overwhelming preference for well-established assets, which are perceived to be less volatile and supported by traditional institutions. This interest also extends to other Layer 1 competitors (such as Solana and BNB Chain), which serve as decentralised smart contract platforms and foundational infrastructures for their own ecosystems.
- Half of respondents hold stablecoins, leveraging their non-volatility as a hedge and as a reliable on and off-ramp to the crypto market. Stablecoin interest has grown since last year, likely due to the maturity of established stablecoin frameworks and the underperformance of many DApprelated tokens, relative to majors like Bitcoin and Solana.
- The research shows a diverse range of portfolio compositions and investment strategies, with nearly 40 percent investing in Decentralised App (DApp) tokens and 39 percent in NFTs. Only 13 percent of respondents solely invest in blockchain protocol tokens.
- The lower interest in private company-issued tokens and tokenized assets is likely due to their limited availability and liquidity. As new issuances and tokenized products come to market, we may see allocations to these assets increase.
What are your future crypto allocation plans?
- More than half of respondents plan to increase their crypto asset allocation in the future. This indicates optimism and confidence in the market’s long-term potential, despite existing macro and geopolitical challenges.
- 36 percent plan to maintain their current allocation, likely awaiting further market confirmation or optimal timing to decide. This caution may stem from the crypto market having yet to price in the recent positive macro developments, relative to equities and more recently gold, which have seen substantial growth. More importantly, however, only a small minority of investors are decreasing their crypto market positions.
- The research also indicates investors who are planning to maintain their allocations are likely to increase their allocations sooner if market conditions improve, with 46 percent planning an increase in the next six months and over 60 percent flipping bullish by 2025.
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