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Study Reveals: Institutional Investors Acknowledge the Significance of Digital Assets in Diversified Portfolios

Institutional investors are increasingly recognizing the value of digital assets in their investment portfolios, according to new research from London-based regulated digital assets hedge fund, Nickel Digital Asset Management. The study, which surveyed institutional investors and wealth managers managing a total of $3.5 trillion across seven countries, found that 92% of respondents believe digital assets play a crucial role in portfolios.

However, the majority of respondents (66%) believe that digital assets should only have a moderate presence in portfolios. Conversely, 32% see a more significant role for these assets, while 39% suggest a minimal role. Interestingly, only a small fraction (7%) believe digital assets should be excluded altogether.

The research also revealed a growing optimism in the launch of digital asset-focused funds. 62% of respondents anticipate a rebound in fund launches within the next year. However, a significant factor for investors is the backing of major financial institutions. 96% of respondents consider this backing important, with 57% emphasizing it as crucial.

Tokenization, which involves the digital representation of assets on a blockchain, is another trend gaining attention from institutional investors. 85% of respondents expect growth in tokenization over the next three years, with a quarter of those predicting a dramatic surge.

Despite the growing interest, there are still barriers to broader adoption. The primary concern expressed by skeptical investors is volatility, with 51% highlighting it as a major issue. Security concerns and a lack of understanding about the sector are also significant hurdles, with 45% and 40% of respondents citing them, respectively. Regulatory concerns, on the other hand, seem less pressing, with only 34% expressing apprehensions.

Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, commented on the findings, noting that the diversification potential of digital assets is gradually gaining recognition among institutional investors and wealth managers. He added that while opinions differ, a moderate role for digital assets aligns with expert views on how they can bolster performance.

Nickel Digital Asset Management, known for its risk management and consistent performance, serves as a bridge for traditional investors into the digital assets market. The company offers a range of strategy solutions tailored for various risk profiles.

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