7 months ago
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The KPMG report shows that Canadian institutional investors who would hold crypto directly have increased to 75% in 2023, against 29% in 2021.
Financial consulting giant KPMG recently conducted a survey stating that nearly 40% of Canada’s institutional investors have sought exposure to cryptocurrencies. As per the joint survey conducted by KPMG Canada and CAASA, Canadian institutions had direct or indirect exposure to cryptocurrencies in 2023, up by 31% from 2021.
“In our 2021 survey, crypto assets experienced robust growth,” notes Kunal Bhasin, a partner at KPMG in Canada’s Digital Assets practice.
Reflecting on subsequent developments, Bhasin acknowledges the turbulence of the following year in 2022, marked by significant collapses of crypto firms and a surge in fraudulent activities. Despite these challenges, he suggests that these events ultimately had a “cleansing effect” on the crypto industry.
“Our survey findings suggest crypto assets are increasingly seen as an investible alternative asset class among such institutional investors and financial services organizations in Canada,” said Bhasin.
Also, there’s a substantial surge in institutional investors holding cryptocurrencies directly at 75%, up from 29% three years ago in 2021. However, their exposure to crypto via the exchange-traded funds has remained unchanged. Since 2021, the exposure of institutional investors to crypto through ETFs and other regulated products has been constant at 50%.
Furthermore, the KPMG survey mentions a substantial increase in Canadian institutional investors, having access to crypto holdings through public equities and derivatives. Kareem Sadek from KPMG’s Digital Assets practice said that the major pivotal moment was the US SEC approving spot Bitcoin ETFs earlier this year.
Canada’s Rising Adoption of Crypto
In a recent interview with Nasdaq, Mark Greenberg, Managing Director for Canada at Kraken, expressed his belief in the ongoing growth and mainstream appeal of cryptocurrency adoption among Canadians.
“We are witnessing growing adoption across all segments of the Canadian market, including individuals, institutions, and various demographics,” Greenberg stated confidently.
He remained optimistic about the future trajectory of crypto adoption in Canada, anticipating further increases in the years ahead. “I am bullish on cryptocurrencies globally and even more so in Canada where we have a high proportion of people underserved by the existing traditional financial system.”
Some top market analysts also expect institutional adoption of crypto to rise globally this year in 2024. This would help bring more liquidity to the market, improving market stability and reducing volatility. Additionally, the regulated products would also attract pension funds and other traditional players, who would be otherwise reluctant, to seek exposure to crypto.
