A new survey
commissioned by crypto asset insurance company, Evertas, a
cryptocurrency insurance firm, found that institutional investors plan
to significantly increase their stakes in Bitcoin (BTC) and other digital assets in the future.

After
surveying 50 institutional investors that collectively manage over $78
billion in assets in the United States and United Kingdom, a standout
response was that 26% of participants believe that pension funds,
insurers, family offices and sovereign wealth funds will raise their
stakes in cryptocurrency “drastically”.

64% of participants believe the increase in interaction will be moderate, but the group also expects that hedge funds
will be more actively engaged in crypto. 32% of respondents believe
hedge funds will increase their crypto holdings drastically.

Institutions have a love-hate relationship with crypto

Institutional
investors seem keen to invest in Bitcoin and other cryptocurrencies
partially because they believe regulations for the crypto market will
improve and become clearer in the future.

Others believe
that the market will eventually become bigger, providing better
liquidity, a feature that most institutional investors require. As the
market improves, many also believe there will be a wider range of
investment vehicles for institutions to choose from.

The
survey also found that there are still many bumps in the road to crypto
institutionalization. More than half of the participants said that they
are concerned about the lack of insurance for digital assets, while
others are worried about the quality of custodial services, trading
desks, reporting facilities and the procedures of other companies
working in the sector.

J. Gdanski, CEO and Founder of Evertas, told Cointelegraph:

“Our
research shows that institutional investors are enthusiastic about
increasing their exposure to cryptocurrencies and crypto assets in
general, but there are clearly many issues regarding the infrastructure
that supports these markets that still concerns them. These clearly need
to be addressed if the full potential of investment from institutional
investors in crypto assets is to be realised.”

While
the outlook on regulating Bitcoin and other established crypto assets
may be positive among institutional players, the same may not be true
for other sectors of the cryptosphere.

Such sectors include decentralized finance (DeFi) and stablecoins, which have seen massive growth in 2020 and may soon face their own regulatory hurdles.

Institutions ignore Bitcoin’s volatility by taking a bird’s-eye view

While the price of Bitcoin has failed to live up to the post-halving rally that many investors anticipated, institutions remain interested in Bitcoin. Recently, the trading volume for Bakkt’s Bitcoin futures reached a new record of more than $200 million worth of contracts exchanged, suggesting that institutions are still accumulating BTC.

Furthermore,
mainstream fund managers are beginning to enter the market, a sign
which the majority of the Evertas survey participants believe is a major
factor in the institutional adoption of crypto.

Just last week MicroStrategy CEO, Michael Saylor, followed the footsteps of veteran investor, Paul Tudor Jones
by purchasing 21,454 BTC. Earlier in the year Jones revealed his stake
in Bitcoin, describing the assets as the “fastest horse” with the best
odds performance wise.

As investors’ interest in
crypto-assets grows and the regulatory landscape for these assets
becomes more clear, it's expected that the wave of institutions flocking
to Bitcoin will continue to increase.