The managers of hedge funds, pension funds, and endowments are increasingly looking at cryptocurrency as a potential investment opportunity, according to new research by startup Evertas.
The company recently conducted a survey of 50 institutional investors managing more than $78 billion in assets across the U.S. and U.K.
And the research presents a rosy picture for the future of cryptocurrency...
The findings indicated that 90% of respondents believe institutional investors will increase their investments in cryptocurrency between now and 2025. Of these respondents, 32% expect hedge funds will make meaningful investments in cryptocurrency.
Part of this enthusiasm is being driven by increasing corporate investment in cryptocurrency.
Last month, Microstrategy, a developer of business intelligence software, disclosed that it had purchased roughly $425 million in bitcoin with corporate savings.
Digital payments company Square announced that it would be making its own $50 million bitcoin investment.
Admittedly, the adoption of cryptocurrency by institutional investors has been slow. Like everyone else, these guys are often skeptical of unproven investment opportunities.
However, as I’ve said in the past, cryptocurrency is still very early in its life. Every day that passes without a hack or significant long-term drop in price builds the asset’s credibility as an investment.
This is especially important as it aligns with the generational changes in the management of these institutions.
By 2025, the millennial employees of institutional investment firms will be coming into their late 30s, reaching an age where they will likely have greater managerial decision-making power. Previous research studies have demonstrated that millennials are more likely to be interested in cryptocurrency investments than their baby boomer peers.
This may come as welcome news for cryptocurrency investors.
Bitcoin has been bouncing between $10,000–11,000 over the past month, leading many investors to question when we can expect the cryptocurrency to move higher.
But remember: Institutional investors control billions of investment dollars. In other words, these guys have the power to move the market.
With growing interest from institutional investors now on the horizon, bitcoin’s next big move may come sooner than we expect.