Institutional interest in cryptocurrencies has not budged despite the market being down 60% from all-time highs (ATH), as most asset managers stated they are “extremely interested” in it. themed crypto-Exchange traded funds (ETF).
On April 3, financial services firm Brown Brothers Harriman (BBH) launched its Global ETF Investor 2023 Survey which surveyed 325 institutional investors, financial advisers and fund managers from the US, UK, Europe and China.
It found that nearly three-quarters of institutional investors said they are "extremely" or "very" interested in cryptocurrency ETFs, but the effects of the crypto winter have dampened their appetite, with only a quarter saying which expects to increase the allocation to cryptocurrency ETFs. in the next 12 months, a 6% drop from 2022.
The results of our 2023 Global ETF Investor Survey are now available. Explore the report to learn the shifts ETF investors are making in the face of macro and market shifts, and what the past decade in ETFs can tell us about the next ten years. https://t.co/KeTeAUfz8G#ETF pic.twitter.com/ueDlwvynNQ
—Brown Harriman Brothers (@bbh) April 3, 2023
While crypto-themed ETFs fell off the priority list for some, nearly half still plan to “add” crypto ETFs to their portfolios this year to diversify investments.
BBH explained that the rise in interest in crypto ETFs is partly because fund managers are learning to withstand the inevitable volatilities in the crypto market:
“As investors adjust to volatility, they diversify their portfolios and add more innovative products. Even with a tumultuous year in crypto, interest hasn't completely cooled."
BBH believes that a clearer crypto regulatory framework will further increase the demand for related ETF exposure as it will provide more “convenience” when doing business with the crypto sector:
"Initiatives such as the EU Crypto Markets proposal draft regulation are expected to 'reduce the risk' of crypto asset investments for asset managers and provide an 'extra layer of comfort' for fund managers participate in the crypto exchange."
More than 40% of those surveyed said they manage assets worth more than $1 billion and more than half said they have more than a quarter of their portfolio invested in ETFs.
Related: Samsung Investment Arm to Launch Bitcoin Futures ETF Amid Rising Interest in Crypto
Among the largest cryptocurrency ETFs are the ProShares Bitcoin Strategy (BITO) available on the New York Stock Exchange (NYSE) and the Bitwise 10 Crypto Index Fund (BITW). BITO was reportedly the first bitcoin-pegged ETF launched in the United States, while BITW tracks the 10 largest cryptocurrencies by market capitalization.
Grayscale's Bitcoin Trust (GBTC), while not an ETF, is one of the largest digital asset investment products by market capitalization traded on a stock exchange with a current value of $11 billion. according to Google Finance.
Not all cryptocurrency ETFs have fared well, as the effects of the cryptocurrency market winter saw two Australian cryptocurrency ETFs: BetaShares Crypto Innovators ETF (CRYP) and Cosmos Global Digital Miners Access ETF (DIGA). take the title as the worst performing ETFs in the country.
It resulted in DIGA, along with Cosmos Purpose Ethereum Access ETF (CPET) and Cosmos Purpose Bitcoin Access ETF (CBTC) being Delisted at the end of 2022.
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