A survey has found that the UK is one of the most attractive markets for hedge fund managers focussed on crypto and digital asset funds.
The research, commissioned by Europe’s largest digital asset management fund, Nickel Digital, found that 74 per cent of UK institutional investors and wealth managers plan to increase their exposure to crypto and digital assets between now and 2023.
Six out of 23 respondents said they will ‘dramatically’ increase exposure in the next two years.
The fund managers, who collectively take care of $66.5bn in assets, cited the prospect of large capital appreciation as a major reason for increasing exposure to crypto. Just under half of respondents saying that improvements to the regulatory environment was increasing their confidence in investing.
Anatoly Crachilov, CEO and Founding Partner of Nickel Digital, commented: “Despite the recent correction in the crypto market, our survey confirms there is an ever-increasing appetite for this asset class among professional investors, willing to take constructive longer-term view on this asset class.”
Nickel Digital has delivered a strong performance for the first half of 2021 with the fund up 12.6 per cent. The fund jumped by 4.1 per cent in April and stayed in the green during May, up 2.6 per cent even though the price of Bitcoin dropped by more than 40 per cent.
The survey also identified a number of barriers to greater digital asset investment. Nearly three quarters of respondents said that the structure of the crypto market, which comprises thousands of small cap projects, creates liquidity problems and a lack of transparency for investors.