According to the Future Finance Report 2024 prepared by digital bank Sygnum, 57% of institutional investors plan to increase their investments in digital assets in the near future. This high level of interest indicates the growing confidence in cryptocurrencies on the part of major financial players and the strengthening of their position in the market.

According to a new report, most large funds and hedge funds plan to increase their investments in digital assets in the coming months. This is especially important in the context of global economic uncertainty, when traditional markets are showing low returns and high volatility.

Why are institutional investors increasing their interest in cryptocurrencies?

1. Higher returns compared to traditional assets
   With declining bond yields and high volatility in stock markets, institutional investors are looking for new sources of returns. Cryptocurrencies, such as Bitcoin and Ethereum, have shown significant growth over the past few years, attracting large capitals looking to increase returns on their portfolios.
2. Adaptation of regulators and infrastructure growth
   Recent years have seen significant progress when it comes to the regulation of the cryptocurrency market. Countries such as the US, UK and Germany are introducing legislation to simplify and legalize working with digital assets. This creates a comfortable entry environment for institutional investors who can now be confident in protecting their assets. The emergence of new financial instruments, such as Bitcoin ETFs, is also contributing to the growth of institutional investment.
3. Interest in decentralized finance (DeFi)
   Decentralized financial platforms open new opportunities for institutional investors. DeFi protocols offer high returns on deposits and the ability to participate in various financial transactions without intermediaries. The attractiveness of DeFi stems from both the opportunity to generate income and innovative financial solutions that were previously unavailable.
4. Hedging inflation risks
   One of the key factors behind the growing interest in cryptocurrencies is inflation risks. Central banks around the world continue to pursue quantitative easing policies, which increases the money supply and reduces the purchasing power of traditional currencies. In an inflationary environment, cryptocurrencies, especially Bitcoin, are perceived as “digital gold” and a means of preserving value, making them attractive for risk hedging.

Future forecast: institutional demand will only increase

Despite periodic fluctuations and volatility of the cryptocurrency market, the long-term prospects look very optimistic. In 2024 and 2025, we can expect an increase in demand for cryptocurrencies from pension funds, insurance companies and large investment banks.

Particularly interesting is the fact that many companies that were previously skeptical about cryptocurrencies are now revising their strategies. As a result, according to the survey, more than 60% of institutional investors plan to increase their investments in digital assets in the coming years.

Opinion of Alakris Group analysts

Analysts of Alakris Group fund also support this opinion and believe that the current environment is extremely favorable for entering cryptocurrencies. The bullish trend is expected to continue in the coming months, especially against the backdrop of increased interest from institutional players and the introduction of new financial products such as cryptocurrency ETFs. Investors are advised to consider diversifying their portfolios and utilizing digital assets as a means of hedging inflation risks and increasing total returns.

As the market continues to grow and attract more capital, institutional investment plays a key role in stabilizing cryptocurrencies and increasing their credibility among a wide audience. Now is the best time to take a position in the fast-growing and promising segment of digital assets.

Thus, if you are considering investing in cryptocurrencies, the current period could be an ideal time to enter the market, as major players are increasingly betting on this asset class, recognizing its potential and strategic importance in the long term.