Institutional users of crypto assets expressed a positive outlook on the performance of crypto assets over the next 12 months. A recent study conducted by Binance Research, in collaboration with Binance VIP & Institutional, has revealed that a notable 63.5 percent of institutional users engaged with cryptocurrencies hold a positive outlook for their future. Furthermore, an even more impressive proportion of respondents (88 percent) have conveyed an optimistic perspective on the trajectory of crypto assets for the next decade.
Drivers of adoption
Interestingly, the survey also delved into the factors that are expected to drive the adoption of cryptocurrency within the institutional investor community. More than a quarter (26.9 percent) of respondents believed that increased real-world use cases would be a significant driver, closely followed by regulatory clarity improvements (25.3 percent). This emphasis on real-world utility and regulatory stability over short-term price fluctuations could reflect the longer-term perspective taken by institutional participants.
In terms of specific cryptocurrencies, Bitcoin emerged as a notable focal point. While perceptions of Bitcoin and the broader crypto sector remained relatively stable over the past year (47.8 percent and 44.7 percent respectively), a larger proportion of respondents exhibited a more positive stance towards Bitcoin compared to the overall crypto market (47.3 percent vs. 33.2 percent). Conversely, while a portion of investors (22.1 percent) expressed a more negative view of the broader crypto sector, a mere 4.8 percent held a similar sentiment towards Bitcoin.
Allocation and expected changes
The survey also explored the allocation strategies of institutional investors in the crypto space. Despite the volatility and market events of the previous year, a significant majority (47.1 percent) of respondents had maintained their crypto allocation, while a notable 35.6 percent had increased their allocation during the same period. A smaller minority (17.3 percent) opted to decrease their exposure to crypto assets.
Looking ahead, the survey offered insights into the expected changes in allocation over the next year. A substantial portion (50.0 percent) of respondents expressed their intention to increase their crypto allocation, with an additional 45.7 percent planning to maintain their current allocation. A mere 4.3 percent of investors indicated a potential reduction in their exposure to crypto assets.
Investment motivations and trading venues
The motivations behind institutional investment in cryptocurrencies were also explored in the survey. A significant percentage (42.8 percent) of investors cited the potential for substantial returns as the primary driving factor for their involvement in the crypto market. Additionally, 37.5 percent of respondents indicated their belief in gaining long-term exposure to an emerging technology as a key motivation for their investments.
The survey also shed light on the preferred trading venues of institutional investors. Centralised exchanges emerged as the most popular platforms for trading (90.5 percent) and custody activities (58.2 percent). Factors such as liquidity (28.0 percent), security (26.0 percent), and reputation (22.5 percent) were highlighted as the top criteria guiding the selection of a trading platform.
