New research from Nickel Digital Asset Management (Nickel) reveals that institutional investors with exposure to Bitcoin will increasingly invest in altcoins (a cryptocurrency other than bitcoin).
Institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who collectively have USD275.5 billion in assets under management were surveyed, and 32 per cent predict that professional investors with an allocation to Bitcoin will invest in altcoins for the first time over the next 12 months. One in three (33 per cent) believe they will dramatically increase their allocation, and 29 per cent think they will do so slightly.
When asked why they believe professional investors are increasingly focusing on altcoins, 54 per cent said it was because a range of cryptocurrencies have seen their market cap reaching meaningful thresholds and establishing leadership positions. This was followed by 45 per cent who said it is because crypto assets are showing attractive diversification benefits from bitcoin, and 44 per cent who said it is because they believe upside potential of this market warrants a long-term portfolio allocation.
Anatoly Crachilov, co-Founder and CEO of Nickel Digital, comments: “Many DeFi protocols have seen their market cap increasing dramatically over the past year, with valuations rising faster than Bitcoin. These assets are addressing real life use cases and based on greater programmability than Bitcoin, which is reflected in their price dynamics. It is no surprise therefore that forward-looking institutional investors and wealth managers are increasingly paying attention this emerging part of crypto market.”