Institutional investors and high net worth (HNW) individuals’ adoption of crypto has dwindled because of the 2022 bear market. But before the start of the bear market, 2021 saw the rise of millionaires and institutional investors putting capital on the asset class.
However, even though the market environment is hostile in the last half of 2022, institutional investors and HNW individuals still have some faith in digital assets.
According to recent news, big investors are returning to bitcoin as a result of the recent market rally. This is evident as majority of millionaires have asked their financial advisors for guidance in investing in digital assets.
82% Of Investors Seek Knowledge On Crypto
DeVere Group, a financial consultancy company, recently surveyed individuals with 1 million to 5 million euros of investable assets and they found out that 8 out of 10 high net worth individuals have asked about how to invest in virtual assets. This is surprising considering that 2022 saw some of the biggest bankruptcies and collapses in the industry.
Major breakdowns of institutions like Three Arrows Capital and FTX have shaken the market and the trust of institutional investors and HNW individuals. According to Nigel Green, the CEO of DeVere Group, even the seemingly conservative group wants to either increase exposure or include bitcoin in their portfolio.
This means a lot for crypto and Web3 projects as more traction in the world of HNW individuals could also boost interest in institutional investors.
With digital asset ETFs already existing for investors, we might see more acceptance of digital currencies in the traditional financial space. However, this may be already happening as major financial entities also dive deep in crypto with their own digital asset investment vehicles.
What Does This Mean For Bitcoin?
The main argument against investing in crypto is its volatility and being unregulated asset class that exists outside of the law. This may seem a big contention, but the world of finance has evolved with countries even regulating digital assets, giving investors a sense of security.
The most recent rally of cryptocurrencies is also a sign that major investors are returning to pour capital in the market. With regulation coming around the corner, it may boost investor confidence and trust in the world of crypto.
As 2023 moves forward, we should expect bigger capital inflows to the crypto industry as acceptance increases. With the growing popularity of top assets like Bitcoin, this reality is not far from happening.
Meanwhile, according to data from asset manager CoinShares, the last seven days saw the largest weekly rise in digital asset investment product inflows since July of last year, at more than $117 million.
Joseph Edwards, investment adviser at Enigma Securities, shares his thoughts on this:
“For the most part, people are more confident than they were a month ago in crypto.”
This may indicate that bitcoin and other digital currencies are gaining ground in the broader market, analysts said.
At the time of writing, Bitcoin is trading at $22,850, down 0.6% in the last seven days.
Featured image from Forbes