Binance Research, the research arm of the world’s largest cryptocurrency exchange, recently conducted a survey to gauge the outlook of institutional investors towards cryptocurrencies. The survey, titled the “Institutional Crypto Outlook Survey,” was conducted between March 31 and May 15, 2023, with 208 global institutional clients and VIP users participating as respondents. These respondents represented a diverse range of institutional investors with varying levels of experience and assets under management (AUM). Over 48% of the participants had more than five years of experience in crypto investing. Furthermore, 52.4% of the respondents had crypto AUM below $25 million, while 22.6% had AUM above $100 million.
Optimism for the Crypto Sector
The survey revealed that a majority of institutional investors hold an optimistic outlook for the crypto sector in the next 12 months. Specifically, 63.5% of the respondents expressed their optimism for the industry within the given timeframe. Interestingly, when the timeframe was extended to a decade, an overwhelming 88% of the participants indicated a positive outlook for cryptocurrencies. This indicates a strong belief in the long-term potential and growth of the crypto market among institutional investors.
Allocation and Interests
When it comes to allocation, the survey found that 47.1% of the respondents maintained their crypto holdings over the past year, while 35.6% increased their holdings within the same period. Additionally, approximately half of the participants expect to increase their crypto possessions over time, while a small percentage (4.3%) expressed their intention to decrease their holdings in the next year.
In terms of interests, institutional investors showed a strong focus on layer-1 and layer-2 sectors and infrastructure within the crypto industry. Roughly 54% of the participants considered infrastructure to be the most important aspect for them or their funds. This was followed by layer-1 (48.1%) and layer-2 sectors (43.8%). Furthermore, the survey revealed that decentralized applications (dApps) were the most commonly used applications in recent months among the respondents.
Moreover, the survey shed light on the factors driving crypto adoption among institutional investors. Respondents expressed their belief in the importance of real-world use cases and regulatory clarity. Approximately 27% of the participants emphasized the need for more real-world use cases to drive adoption, while 25.3% highlighted the significance of regulatory clarity. The survey also highlighted the desire for increased institutional participation through banks and other financial institutions, as well as the importance of stronger security measures such as fraud detection and custody solutions.
The survey conducted by Binance Research provides valuable insights into the outlook and preferences of institutional investors in the crypto sector. The results demonstrate a widespread optimism for cryptocurrencies among these investors, both in the short and long term. The survey also highlights the importance of infrastructure, layer-1 and layer-2 sectors, and regulatory clarity in driving adoption. These findings suggest a positive trajectory for the crypto industry as it continues to evolve and attract institutional interest.