A recent report found that 57% of institutional and professional investors plan to increase long-term crypto allocations. Also, 65% are bullish long-term, while 63% plan to allocate more funds in the next 3-6 months.
These and other findings show high-risk appetite and growing trust in digital assets, according to the annual Future Finance survey report by the global digital asset banking group Sygnum.
Overall, the report found that sentiment could “quickly turn” more bullish in 2025, followed by increased allocations.
Beyond 2025, sentiment turns “overwhelmingly bullish.” The respondents expect that the crypto market will establish “a stronger foothold in the traditional finance sector.”
Source: Sygnum
At the same time, the report noted mixed short-term outlooks. Some survey respondents said they would continue to monitor the markets and evaluate new developments.
Additionally, there are concerns regarding geopolitical tensions and macro instability.
Notably, Sygnum’s survey involved over 400 respondents in 27 countries, with an average of ten years of investment experience. These are banks, hedge funds, multi- and single-family offices, DLT foundations, funds, and asset managers, including Sygnum clients and investors.
Of these, 83% are ‘crypto activated,’ meaning they currently invest in crypto.
More than half of portfolios (53%) have in excess of 10% allocated to crypto assets.
Source: Sygnum
63% of respondents have a high-risk appetite for the asset. This suggests that most crypto-activated respondents are more comfortable with its volatility, Sygnum said.
79% Plan to Increase or Invest Within the Year
It is significant to note that more than half of respondents plan to increase their crypto asset allocation.
This suggests confidence in the market’s long-term potential, despite the above-noted concerns.
Meanwhile, 36% plan to maintain their current allocation. They may be waiting for further market confirmation or optimal timing to decide.
“This caution may stem from the crypto market having yet to price in the recent positive macro developments,” the report argued.
If the market conditions improve, even the investors maintaining their allocations are likely to increase them sooner. 46% plan to increase in the next six months and more than 60% are “flipping bullish” by next year.
Additionally, only a small minority of investors are decreasing their crypto market positions.
Moreover, 79% of the respondents plan to increase or invest within the year.
Source: Sygnum
More precisely, 31% of investors with existing crypto holdings plan to increase their allocations in Q4 2024.
Another 32% aim to increase their allocation within six months. These probably expect that lower geopolitical risks and post-US election stability may provide better market conditions, the report noted.
Other key factors investors are keeping an eye on are China’s stimulus package, the start of the rate cut cycle, and looser liquidity conditions.
These factors may accelerate crypto allocations and flows into Bitcoin and Ethereum exchange-traded funds (ETF) products.
Among the respondents who plan to maintain or increase their allocations, 57% expect higher future returns.
Meanwhile, most (54%) indicate portfolio diversification as a primary investment driver, followed by a higher risk appetite, increased access to regulated service providers, and seeing crypto as a superior investment case.
New Money Coming in Q2-Q3 2025 Strengthening Bullish Trend
The majority of investors not currently investing in crypto plan to enter the market in the next 12 months.
“This group suggests that the broader subset of traditional investors (potential new money) is more likely to flow into the market by Q2 and mid-2025,” the report said.
Among the respondents who are not crypto investors, 27% plan to make an allocation in the future.
More than half remain undecided, likely due to the crypto market’s volatile Q3 2024 performance and rising macro and geopolitical risks.
“However, among those undecided, two-thirds would be encouraged to invest in crypto as a safe haven and macro hedge, with many planning to revisit their allocation decision within the year,” the report said.
53% of respondents who do not invest said volatility is the leading barrier. Concerns about security and custody remain high as well, at 39%.
Source: Sygnum
“Interestingly, regulatory uncertainty has historically been the primary challenge for traditional investors, suggesting that the regulatory progress has improved confidence in the crypto market,” the report said.
81% said that better information would lead them to invest more.
That said, 76% of respondents said they possess high levels of crypto and blockchain knowledge, “primarily due to the growing interest and active involvement of traditional investors in the crypto market.”
Most Invest in Layer 1 Coins
Meanwhile, 72% of respondents said their organizations are open to asset investing.
Single family offices, external asset managers, fund managers, hedge funds, trading firms, and private equity firms show the highest level of openness.
Banks are generally open but show a broader range of views, “including many who are not open to crypto asset investing at all.”
Insurance companies and multi-family offices indicated a variety of views as well, from strongly open to strongly opposed.
That said, the highest area of interest for the respondents is Layer-1 (76%), while Web3 infrastructure is the second most attractive crypto investment area (55%).
Source: Sygnum
Interest in DeFi declined this year, likely due to regulatory and security concerns.
Additionally, 91% invest in blockchain protocol coins, such as Bitcoin, Ethereum, Solana, and BNB.
“This reflects an overwhelming preference for well-established assets, which are perceived to be less volatile and supported by traditional institutions,” the report said.
However, only 13% solely invest in blockchain protocol coins. Investors prefer to diversify.
Interest in stablecoins has grown since last year, with half of the respondents holding this asset, the report concluded.
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