Institutional investors and wealth managers in the UAE are planning to increase their exposure to crypto in the next few years.
A London-based Nickel Digital Asset Management survey showed that ten institutional investors said, “they plan dramatically increase their exposure to cryptocurrency assets now and 2023.” Anatoly Crachilov, chief executive and founding partner of Nickel Digital, said:
“Despite the recent correction in the crypto market, our survey confirms there is an ever-increasing appetite for this asset class among professional investors, willing to take [a] constructive long-term view. We are glad to see increasing adoption of digital assets by many family offices based in the UAE, as well as across the Middle East.”
Currently, market correction, institutional players have double down on crypto investments. Players like Ark Investment and Rothschild Investments have been gaining exposure to Bitcoin. Highly investing in regulated instruments like the Grayscale Bitcoin Trust(GBTC).
Cryptocurrencies are not licensed by the UAE Central Bank. Besides, several exchanges have secured legal licenses to operate within the Abu Dhabi Global Market. The UAE dirham is the only legal tender in the country that is recognized by the central bank.
In 2021, there have been a total of $5.7bn inflow of institutional money in crypto assets. About 73 percent of this has been invested in Bitcoin. There is now almost $37bn invested in cryptocurrency funds globally, the report says.
A majority of UAE-based professional investors surveyed by Nickel cited the long-term capital appreciation prospect of cryptocurrency assets. Additionally, the investors noted that asset class improving regulatory environment and larger liquidity pools.
An overwhelming majority of investors said the lagging global regulator’s clarity was a hurdle to investing in cryptocurrencies. Nickel Digital Asset Management is authorized by the Financial Conduct Authority in London. Utilizing hedge fund strategies in the cryptocurrency sphere and run by alumni from Wall Street banks like Goldman Sachs, JPMorgan.
