A survey by Nickel Digital Asset Management has found the UK has become one of the most appealing markets for hedge fund managers that focus on crypto and digital assets.
The survey included 23 institutional investors and wealth managers who collectively oversee around $66.5bn in assets and who currently have some form of exposure to digital assets.
It was found that six of those interviewed for the survey expect to dramatically increase their exposure to cryptoassets between now and 2023, while another 11 said they intend to add to their exposure.
The most important reason given by survey respondents for greater allocation to digital assets is the ‘structural long-term capital appreciation prospects’ of cryptoassets – a view that was cited by 16 of the 23 UK-based investors.
A further nine investors said they were having some exposure to cryptoassets and have become more comfortable and confident in how the asset class works and the infrastructure around it. The same number of investors said it was because of the improving regulatory environment.
The survey also found, however, several hurdles to investing in cryptoassets. Up to 16 of the 23 investors that was interviewed highlighted concerns about the size of the cryptoasset market and its liquidity, while the same number cited a lack of market transparency.
Meanwhile, 15 of the 23 cited custodial services for cryptoassets was a hurdle in relation to investing in the asset class, while 15 said something similar about market volatility.