Institutional users recognize the long-term potential of crypto assets, according to a recent report by Binance Research which surveyed 208 respondents on their attitudes, preferences, and motivations toward cryptocurrency investments.
Positive and Long-Term Outlook On Crypto as an Alternative Asset Class
The Institutional Crypto Outlook Survey showed that “a majority of institutional users hold a positive outlook for crypto assets both in the short term and the long term.”
63.5% of the respondents surveyed “expressed confidence in crypto over the next 12 months, while a significant 88% indicated confidence over the next decade.”
Institutional users also “ranked the development of practical, real-world use cases of cryptocurrencies as the highest factor (26.9%) in bringing about mass adoption, contrasted against just 4.3% of respondents who viewed higher prices as the most important factor.”
This indicates institutional users are “looking beyond short-term speculation and market cycles and recognize crypto assets for their long-term potential.”
Institutional Crypto Allocation Strategies Tend Towards Long-Term
Despite market events over the past year, “a majority of investors (47.1%) maintained their crypto allocation, while 35.6% increased their exposure during the same period. Only a minority (17.3%) decreased their crypto allocation.”
50% of respondents expect “to increase their allocation over the next 12 months, and 45.7% would maintain their exposure.” This leaves only 4.3% of investors “expecting to reduce their exposure.”
Over half (53.9%) of investors “found infrastructure to be the most important sector for them or their fund, closely followed by Layer 1 and Layer 2 technologies (48.1% and 43.8%, respectively), suggesting again institutional users tend to have a long-time horizon.”
Investing Motivation and Choice of Platform
Institutional users continue “to use centralized exchanges for trading (90.5%) and custody activities (58.2%), and they primarily considered liquidity (28.0%), security (26.0%), and reputation (22.5%) as the top selection criteria.”
When participating in decentralized finance (DeFi), spot decentralized exchanges “were the most widely utilized type of dApp (27.9%).”
42.8% of investors considered “the potential for substantial investment returns as the main reason for investing in cryptocurrencies, closely followed by 37.5% of investors who prioritized the opportunity to gain long-term exposure to emerging technology.”
Understanding that 90.5% of respondents still preferred CEXs also means “the importance of developing more tools that can facilitate greater institutional adoption of DeFi.”
Catherine Chen, Head of Binance VIP and Institutional.
“The results of the Institutional Crypto Outlook Survey highlight the positive long-term view held by many institutional users regarding the crypto industry. Despite the challenging macro environment, respondents demonstrate continued interest in and commitment to the industry through their portfolio allocation decisions and active interactions with decentralized applications. Overall, the survey responses reaffirm that institutional users are here to stay, which signifies an optimistic outlook for the crypto industry,”
The full report can be accessed here.
