Goldman Sachs: investors are increasing their investments in cryptocurrency. What is driving the growing interest in digital assets?

According to a survey conducted by the American investment bank Goldman Sachs, 60% of its institutional investor clients want to increase their investments in cryptocurrency over the next 2 years. But interest in digital assets is growing not only among “institutions,” but also among private investors. What is the reason for this, and what prospects await the crypto market in the foreseeable future?

According to research, over the past year, 51% of investors purchased cryptocurrency for their portfolios - this share increased by 11 percentage points, from 40% a year earlier. A Goldman Sachs survey showed that about a third of all bank clients participating in it want not only to increase their investments in the crypto market, but to increase them “significantly.”  

About 55% of institutional investors are now willing to allocate 5% of their capital to the acquisition of digital assets. The leaders in interest from Goldman Sachs clients are Bitcoin and Ethereum (with a share of 22%), altcoins occupy third place in this ranking (15%), followed by DeFi tokens (14%) and NFTs (9%).

The American investment bank has realized for quite some time that investors are interested in investing in cryptocurrency. In 2021, it opened up the opportunity for its clients to trade derivatives on the two most popular cryptocurrencies - Bitcoin and Ethereum, and also launched trading in non-deliverable forward contracts based on Bitcoin with settlement in fiat currencies.  

Institutional investors' favor towards cryptocurrencies is steadily growing. Two years ago, Fidelity Investments conducted a similar survey among its clients, pension funds and hedge funds. At that time, the share of its clients - “institutions” who invested in cryptocurrencies was only 27%.

Also private investors

At the same time, interest in digital assets is growing not only among institutional investors, but also among individuals. According to data from Grayscale, in 2021 the share of Americans owning Bitcoin increased to 26% from 23% a year earlier. And worldwide, at the beginning of 2022, the average level of cryptocurrency ownership was 3.9% - that is, about 300 million people.

Regulators and geopolitics

What is the reason for such a stir about digital assets among both institutional and private investors? First of all, this is the policy of global financial regulators. In particular, the US Federal Reserve, despite very tough rhetoric, is not yet in a hurry to sharply increase the rate after increasing it by 0.25 percentage points. at the March meeting.. Seeing the risk of inflation after its rise to 7.9% in February and not very decisive actions on the part of the American central bank, investors are flocking to cryptocurrencies.

In addition, the demand for digital assets is associated with heightened geopolitical risks. Investors are withdrawing money from classic assets and trying to diversify their portfolios by investing in cryptocurrency. As a result, the Bitcoin rate has already risen above 47 thousand dollars and is trying to break through the psychological level of 50 thousand. And Ethereum is again aiming for 3.5-4 thousand dollars.

Source: stormgain.com

Author: Dmitry Noskov - expert crypto exchange StormGain (platform for trading, exchanging and storing cryptocurrency)

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