Binance Survey Reveals 50% of Institutional Investors Plan to Increase Crypto Allocation

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Unsurprisingly, survey participants’ top concerns are regulatory risk (29.7%), counterparty risk (21.6%), custody of assets (15.7%) and macroeconomic risk (10 .6%).

Binance Research, the crypto exchange subsidiary that focuses on providing institutional-grade analysis, in-depth insights, and unbiased information, has released the Institutional Crypto Outlook Survey.

The study, which was conducted in conjunction with Binance VIP & Institutional – a provider of an optimized digital asset trading experience for hedge funds, asset managers, family offices, proprietary trading firms, markets and brokers, revealed that 47.1% of institutional investors maintained their crypto allocation over the past year and more than a third (35.6%) increased their allocation over the same period.

Half of institutional crypto asset holders plan to increase their allocation, with only 4.3% planning to reduce the allocation to crypto over the next 12 months.

63.5% have a positive outlook for the next 12 months

Comprised of insights generated by 208 global institutional investors, the report authored by JieXuan Chua, CFA, Shivam Sharma and Colin Chan, found that 63.5% of respondents indicated they were positive about the outlook for crypto in the over the next 12 months.

When asked about their outlook for the next decade, investor optimism hit an overwhelming 88.0%.

The report also noted that infrastructure is the most important sector for institutional investors or their funds, with 53.9% checking the top infrastructure of their choice, followed closely by the L1 and L2 sectors at 48. 1% and 43.8% respectively.

The study also concluded that intraday strategies (44.7%) are most often cited by institutional investors. Potential return on investment (42.8%) and exposure to technology (37.5%) were the main reasons to enter the crypto space.

Regulatory risk is the top concern for institutional investors

Unsurprisingly, survey participants’ top concerns are regulatory risk (29.7%), counterparty risk (21.6%), custody of assets (15.7%) and macroeconomic risk (10 .6%).

Additionally, institutional investors largely trade on centralized exchanges (90.5%) and 58.2% store the bulk of their assets on CEXs, with only 20.2% on institutional custodians and 14.9 % on self-custodial cold wallets.

Liquidity is the most important trait for institutional investors when evaluating a centralized exchange for their trading needs. This is understandable, given that institutional investors tend to trade larger sizes. Security and reputation were also key features when choosing their CEXs.

Social media (65.4%) is the top source of information and news about the crypto space among institutional participants. This is followed by crypto news outlets (50%) and industry professionals (39.9%).

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