Nomura Survey Highlights Strong Institutional Interest In Crypto

A recent survey conducted by global investment bank Nomura has shed light on the increasing institutional backing for cryptocurrencies among investors. The results are particularly interesting given the recent news of Blackrock seeking approval for a bitcoin ETF and institutions using Microstrategy stock as a proxy for BTC, in the context of the harsh regulatory enforcement that is being taken against the crypto industry.

Nomura established its crypto venture arm, Laser Digital, in September 2022 to explore opportunities in the crypto space. The survey, which covered over 300 institutional investors from 21 countries, with collective assets worth $4.9 trillion, provides valuable insights into the evolving landscape of crypto investments.

Key Findings

Given the current regulatory climate and opposition towards crypto in the US, some of the results may be surprising. However, as the recent news of BlackRock's intention to launch a bitcoin ETF demonstrate, widespread institutional and retail appetite for crypto has not vanished, despite some valid concerns.

• Institutional optimism about the crypto asset class remains high, with 82% expressing positive sentiment for the next 12 months.
• However, professional investors want backing from large traditional financial institutions before investing in cryptocurrencies, with 90% considering this an important step.
• The collapse of FTX and regulatory actions have increased scrutiny on the digital asset sector, and the resulting regulatory uncertainty in the United States has contributed to institutional investor activity in crypto stalling.
• Concerns exist regarding legal and regulatory restrictions that may limit investments in crypto-related funds or products.
• However, 96% of respondents view digital assets as a diversification opportunity alongside traditional asset classes.
• Bitcoin (BTC) and Ether (ETH) are seen as the foundation of the Web3 economy and long-lasting sources of investment opportunities.

The Regulatory Wall

What is clear is that lack of regulation is the single biggest headwind to crypto adoption among institutional investors. The current lack of clarity and court cases in the US effectively pose a near-insurmountable barrier to institutions who otherwise recognise the promise of crypto. Resolving these problems quickly will be fundamental to accelerating access to BTC, ETH, and other digital assets.

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