Close to half of asset managers currently have digital assets under management, according to a new study. Firms large and small are implementing crypto strategies for clients and expanding offerings.
Asset Managers Embrace Crypto: 48% Now Manage Digital Assets
The study by digital currency data provider Amberdata with Coalition Greenwich finds that 48% of institutional investors now manage digital assets. Growth forecasts remain robust despite recent market volatility. Over the next five years, three-fourths of managers expect digital assets under management (AUM) to expand. More than 40% foresee very strong 11-20%+ growth.
Managers see a growing market opportunity to manage digital assets, the report details. Asset managers aim to beat overall market growth, with 44% expecting digital assets to be a growing business line over the next three to five years. The report states:
While a majority believe institutional sentiment toward digital asset adoption has slowed, 46% remain neutral to positive about the current state of adoption. Furthermore, those with a dedicated role in digital assets are notably more positive—so those firms that are true believers remain actively engaged and building.
Strategies span active and passive funds, arbitrage, and venture capital plays. The study notes that the top instruments are exchange-traded products, stablecoins, and cryptocurrencies. The researchers further add that new offerings in the pipeline include tokenized securities and real-world assets.
The report insists that the U.S. is crucial, with managers betting on constructive crypto regulation within five years. The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are seen as providing positive opportunities over time. Presently, overseas hubs like Dubai and Switzerland have drawn more interest.
“Infrastructure, including well-regulated custody, is critical to the ecosystem’s development,” the report says. “The next arms race is centered on data, analytics, and tools to support front-office professionals.”
Amberdata’s research further explains that spending on crypto market data, blockchain analytics, and portfolio systems is set to rise over the next six to 12 months. As the industry matures, managers want to buy rather than build capabilities. New partnerships and outsourcing are likely, the study projects.
“Firms will be on firmer ground when the clouds clear and sunny skies appear next,” the report concludes.
What do you think about the Amberdata report? Share your thoughts and opinions about this subject in the comments section below.