Increasing confidence in Bitcoin and the broader cryptocurrency market has led most institutional investors to plan to increase their long-term allocations to crypto.

Swiss crypto bank Sygnum’s annual “Future Finance” survey revealed greater appetite for crypto assets among institutional investors. The report, published on November 14, highlighted the changing interest and positive market sentiment towards cryptocurrencies.

Martin Burgherr, head of presidential clients at Sygnum Bank, said clearer regulations globally were helping positive market sentiment among institutional investors. Burgherr added:

“Perhaps most importantly, the approval and subsequent launch of US Bitcoin Spot ETFs has the potential to accelerate institutional adoption of digital assets.”

The survey, in which 400 institutional investors from 27 countries participated, revealed that 57% of participants — that is, 228 people — plan to increase their crypto investments. Of these, 31% plan to do so in the next quarter and 32% within six months.

There is generally a high risk appetite among institutional investors, with only 5% planning to reduce their crypto allocations and 2% yet to decide.

However, 44% of institutional investors planning to gain greater exposure to crypto prefer to continue with single token investments. In contrast, 40% chose the investment strategy of actively managing exposure.

According to Sygnum, 36% of institutions planning to maintain their current positions may be waiting for further market confirmation or optimal market entry timing before deciding to increase their crypto investments.

Historically, unclear regulations and restrictive investment guidelines have created major hurdles for traditional investors considering digital assets. However, with the emergence of crypto-friendly regulations, Sygnum noted that high market volatility, security and custody concerns are still the main hurdles for institutions.

The majority of institutional investors (81%) said that better understanding of crypto would enable them to invest more. This marks a shift from regulatory concerns to market-specific risks, strategic planning and in-depth reviews of technology.

Crypto investment preferences remain high for scalable layer-1 solutions, strongly influenced by Bitcoin, Solana and stablecoins.

In addition to crypto assets, institutional investors have also shown increasing interest in Web3 infrastructure, which is “accelerating with the growth of Decentralized Physical Infrastructure (DePIN) and artificial intelligence,” Sygnum noted.

In contrast, interest in decentralized financial services has waned due to the persistent high volume of hacking attacks, which in total have siphoned approximately $2.1 billion from the ecosystem.

Compared to 2023, institutional investors’ interest has shifted from real estate to stocks, corporate bonds and investment funds.