[NEWS] 39% of Canadian institutional investors plan to invest in cryptocurrencies in 2023

A survey conducted by Canadian accounting firm KPMG and CAASA (Canadian Association of Alternative Asset Strategies) found that 39% of institutional investors in the country are investing in crypto assets (virtual currencies).

According to the KPMG survey results, Canadian institutional investors and financial services companies have resumed investing in crypto assets due to the market recovery of crypto assets, improved regulatory clarity, and new innovations in digital assets.

The survey received 65 responses, of which 31 were institutional investors and 34 were financial services institutions. Financial services companies include asset management, capital markets, wellness management, financial advisors, and commercial banks. Institutional investors range from hedge funds, family offices, and venture capital.

According to the survey, 50% of financial services respondents said they will offer at least one crypto asset product or service to their clients in 2023, an increase of 41% from 2021. Meanwhile, 39% of institutional investors said they are investing in crypto assets directly or indirectly. This is an increase from 31% in 2021.

Kunal Bhasin, partner and co-leader of KPMG's digital assets practice, said in a press release, "Our survey results suggest that crypto assets are increasingly viewed as an investable alternative asset class among Canadian institutional investors and financial services institutions."

He also said, "The rise in U.S. Treasury securities and rising inflation rates are likely the catalyst for the rise in crypto assets in 2023, as investors look for alternative asset classes that act as hedges and reliable stores of value."

Respondents in the survey said, "The increase in offerings is an effort to meet customer demand for crypto assets." According to the survey, nearly 80% of financial services respondents cited demand for crypto assets as the main driver of their service expansion, up from 50% in 2021.

"Traditional financial institutions are increasingly aware of the need to offer cryptocurrency services to meet customer demand. However, large Canadian financial institutions will still need to become more familiar with the challenges posed by cryptocurrencies, including anti-money laundering and financial crime, before offering more commercial banking services to crypto companies," cautioned Kareem Sadek, co-leader of KPMG's digital assets practice.

The survey found that half of institutional investors are using a variety of strategies, including direct holdings and investments in Canadian crypto spot ETFs, closed-end trusts, and other regulated products. Fifty-eight percent invest through shares such as Galaxy Digital, which is listed on the Toronto Stock Exchange.

In addition, Canada was the first in the world to approve Bitcoin and Ethereum ETFs in February 2021, which attracted Canadian investors to cryptocurrencies, he noted. In addition, the approval of Bitcoin spot ETFs in the United States in January this year was "a major milestone for the industry," and said that investment is expected to increase further this year.

Reference: Survey results
Image: Shutterstock

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