Key facts:
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Institutional investment has grown 30% in one year and more than 500% since 2020.
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Companies hold 683,332 BTC, or 3.3% of the total Bitcoin supply.
“Bitcoin is increasingly attracting the interest of institutional investors,” says a report from the OKX exchange, highlighting how institutions are allocating more resources to buying cryptocurrencies. This, despite the ups and downs that the digital currency is experiencing and which currently worries the market.
OKX’s study, titled “Digital Assets as the New Alternative for Institutional Investors: Market Dynamics, Opportunities and Challenges,” was prepared by the firm Economist Impact. In it, a compilation of the impressions that leaders of the financial industrysuch as Citi, Skybridge Capital and VanEck, have over the ecosystem.
The firm concludes that digital assets are on their way to becoming in an essential part of institutional portfolios, driving adoption and interest from representatives of traditional financial institutions.
A conclusion reached after determining that almost 70% of institutional investors plan to increase their allocations in cryptocurrencies in the immediate future, and for the next two to three years.
This situation allows us to foresee that, by 2027, these assets will represent 7.2% of the institutions’ portfolios.
Cryptocurrencies such as Bitcoin and Ether (ETH), non-fungible tokens (NFTs), and tokenized private funds and securities such as bonds and stocks are becoming more attractive. The underlying technologies of these assets (blockchains) are gaining acceptance throughout the financial world.
OKX Report.
OKX’s data is corroborated by research firm River, in a study published on September 4th which also analyzes the substantial growth of BTC adoption in the last year. According to its statistics, BTC purchases have grown by 587% Since June 30, 2020, and 30% in the last twelve months.
At this rate, researchers estimate that companies’ bitcoin holdings will grow. between 204 and 519 BTC per day until 2026. “Which equates to a range of $12.2 million and $31.1 million per day at an average price of $60,000 per bitcoin.”
Institutional BTC investment has grown by more than 500% in 4 years. Source: River.
River statistics reveal that companies They already own 3.3% of the total bitcoin supply (683,332 BTC).
In this sense, the study states that most of these companies “have authentic bitcoins”, taking their purchases beyond ETFs because they prefer direct investment in the Cryptocurrency.
Private companies own roughly 23,000 more BTC than public ones. Five companies—MicroStrategy, Block.one, Tether, BitMEX, and Xapo—own a total of 559,000 bitcoins, accounting for 82% of all company holdings. MicroStrategy and Tether alone account for 85% of all publicly reported company bitcoin purchases in the first half of 2024.
River Report
At this point, River’s study highlights the fact that 95% of the companies that have BTC –and that were consulted in their research– is not willing to sell its holdingsregardless of changes in the price.
“Such a fact reflects confidence in the return potential of digital assets,” OKX analysts comment, highlighting The potential of bitcoin to appreciate in the long term, Despite the short-term price declines and which generate fear among many investors.
In this way, the trend points to greater convergence between traditional finance and the cryptocurrency ecosystem. A merger that has been driven from the United States, after the approval of 11 Bitcoin ETFs.
“These products have facilitated access for institutional investors, resulting in increased demand and liquidity in the market.”
Demand for custody services is growing
One of the aspects that stands out in the OKX study is that he rise of institutional interest is mainly reflected in the increase in demand for crypto-asset custody.
“Currently, 80% of traditional and crypto hedge funds using digital assets rely on third-party custodians,” the report says. But this sector, which is just beginning to expand, is expected to grow Most of the big banksgrow up at a compound annual rate of 23% until 2028.
As CriptoNoticias has reported, the increase in institutional investment is also generating changes in regulatory matters.
Research particularly mentions, the convergence of new regulatory frameworksespecially in key financial centres such as Singapore and the United Arab Emirates, which reduces market uncertainty.
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