Cryptocurrencies and other forms of emerging digital assets are becoming popular among pension funds and insurance asset managers. These groups of financial services managers are increasingly becoming determined toward building and diversifying investment portfolios around the new generation of digital assets. By 2025, we could see a large number of hedge funds management companies adopting digital assets to diversify their investment portfolios and latch onto the ongoing crypto boom. It’s clear that cryptocurrencies and tokenization of the hedge funds marketplace would spell a new era in big money investments ecosystems.
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According to a global survey of pension funds, insurance asset managers, other institutional investors, and wealth managers see digital assets as a means to provide diversification benefits for investment portfolios, and tokenization of traditional assets.
According to London-based Nickel Digital Asset Management (Nickel), investment managers are looking at diversification of their portfolios via the acquisition of cryptocurrencies and digital assets. This transformation will happen at a much faster rate once investment managers gain access to the Decentralized Finance (DeFi) platforms. In terms of the role of digital assets in investment portfolios, 53% of professional investors expect digital assets to play in the future, the main one is the diversification of investment portfolios. 51% also believed that tokenization of traditional assets will be key here. 38% highlighted its ability to provide a new value transfer mechanism.
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More than eight out of ten (84%) professional investors believe digital assets will become mainstream, with just 3% saying this will not happen and 13% claiming it is too early to say (please see the attached press release).
Highlights of the report
- 81% believe that digital assets – in particular, DeFi protocols – are emerging as an important disruptive technology for traditional finance. Some 56% strongly agree with this view.
- When asked for their main overarching view on blockchain and digital asset technology, 41% of professional investors said it is scalable and, on the way, to achieving mainstream adoption.
- 21% said it bears strong transformative potential for the global economy.
- By contrast, just 30% believe digital assets will remain a niche technology although there is a compelling business case for it and only 9% believe there is little practical value in the sector and the technology will ‘die out’.
London-based Nickel Digital Asset Management (Nickel) surveyed 200 institutional investors and wealth managers from across seven countries who collectively manage around $329 billion in assets.
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