Cryptocurrencies increasingly seen as a mainstream option among investors

By Gaia Lamperti

Investing in crypto-assets is increasingly seen as a mainstream option, with investors switching funds from savings accounts, shares and bonds, new research from UK-based banking, exchange and investment app Ziglu shows. The study found out that 63% of crypto investors have moved money into cryptocurrencies from other types of investments as people look for long-term alternatives and ways to diversify, with savings accounts and cash ISAs by far the biggest source of investments in cryptoassets.

The research also highlights the diverse range of sources of information that investors rely on when investing in cryptocurrency. Around a third (32%) say they look to crypto trading platforms as one of their sources for guidance on how to invest but almost as many (31%) are relying on advice from family or friends while 22% say they follow experts on social media and 12% rely on social media adverts.

“Cryptocurrency investment is increasingly competing with other mainstream investment and saving accounts with many investors switching funds from savings accounts, cash ISAs and shares,” said Mark Hipperson, Founder and CEO of Ziglu commenting on the research’s findings. “Investors consider crypto-assets as a long-term investment and as a way of diversifying their holdings, but it is also clear that some are putting themselves at risk of making mistakes while they are getting established in the market, by not finding reliable sources for investment information.”

And indeed, even professional investors are increasingly focusing on cryptocurrency and digital assets as worries about stretched equity valuations and poor yields in the fixed income markets grow. New global research from market-leading digital institutional investment platform VALK suggested that a third of professional investors working in 8  major economies for institutions holding more than $1 trillion in assets under management in total,  invested in crypto assets for the first time recently (33%) while 55% have increased their allocation to crypto.

“The institutional investment switch to crypto and digital assets is well underway and the research highlights that with a third making their first investment recently,”  Antoine Loth, Co-founder of VALK said. “It’s a similar story in the wider DeFi market institutions increasingly dominating transactions with recent data showing they accounted for 60% of all transactions in the sector in the second quarter of 2021.”

All the investors surveyed for the study were based in the UK, US, France, Germany, Hong Kong, Singapore, Australia, and Brazil and they all believe that the strong performance of the crypto asset class during the Covid-19 crisis has changed institutional views on the sector. More than half (53%) ‘strongly’ agree that digital assets are a viable asset class while 45% ‘slightly’ agree with this view.

The research found confidence in the crypto sector among the institutional sector is strong with more than half (54%) believing the total market capitalisation of cryptocurrencies will grow to $3 trillion or more by the end of next year compared to around $2 trillion now. By 2025 46% believe total market capitalisation will be $6 trillion or more.