The reputation of crypto in general has taken a hit in the last 12 months; the collapse of FTX saw increased regulatory scrutiny surrounding the space. This was followed by the US regulator, the SEC, suing the likes of Ripple, Binance and Coinbase.
Binance Research and Binance VIP & Institutional have revealed the findings of its Institutional Crypto Outlook Survey, which found that 88 per cent of respondents expressed a positive sentiment on crypto assets for the next decade.
Binance’s survey also found that institutional users believe more real-world use cases (26.9 per cent) and improvements in regulatory clarity (25.3 per cent) would drive adoption, over higher prices (3.4 per cent).
These findings appear to suggest that institutional participants take a longer-term view of the space, over a more reactive approach to short-term market cycles.
Catherine Chen, head of Binance VIP and Institutional, offered her take on the findings: “Institutions typically take a long-term horizon when they enter a new market, and our survey indicates that is likewise for crypto assets, considering the positive outlook from respondents and how they express more belief in use cases as adoption drivers over prices.
“These findings match the healthy rate of institutional account growth on Binance, which has increased 89 per cent since the height of the bull market in Q4 2021.”
Despite the market events over the past year, 47.1 per cent of investors had maintained their crypto allocation; while over a third (35.6 per cent) increased their allocation in the same period. Only a minority (17.3 per cent) decided to decrease their crypto allocation.
Furthermore, 50 per cent of respondents expect to increase their allocation over the next 12 months; while 45.7 per cent plan to maintain their allocation at its current level. Only 4.3 per cent of investors indicated they expect to reduce their exposure to crypto in the same period.
So what is motivating so many institutional users to keep the faith with their crypto allocations? Binance’s research indicates that the most compelling reason to invest in cryptocurrencies is the potential for large investment returns (42.8 per cent). Around 37.5 per cent of investors believe that gaining long-term exposure to emerging technology was the primary motivation.
The research also found that centralised exchanges remain the most popular platform for institutional trading (90.5 per cent) and custody activities (58.2 per cent). Liquidity (28 per cent), security (26 per cent), and reputation (22.5 per cent) were the top three criteria in determining how institutions select a trading platform.
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