Findings from crypto asset underwriter Evertas reveal that 26% of institutional investors believe the industry will “dramatically” increase the level of their investments, while another 64% expect a slight increase.

The survey questioned a range of investors who manage a total of US$74.8 billion ($103.6 billion) in assets.

When asked why they believe investors will increase their exposure to cryptocurrencies and cryptoassets, 84 percent of respondents said it is because they expect the regulatory infrastructure for the market to improve.

The majority (80 percent) also said it was because the crypto market would get bigger, providing more liquidity.

Three in four (76 percent) say they expect more mainstream fund managers and financial services companies to enter the market, with more funds and investment vehicles to choose from.

About half (46 percent) cite negative interest rates and negative bond yields.

However, Evertas found that institutional investors still have significant concerns about buying into the crypto market.

Some 56% of participants said they were “very concerned” about the lack of insurance coverage for cryptoassets, while 54% said they were “very concerned” about the working practices and compliance procedures of companies in the sector that provide services to investors.

Other concerns include the quality of custody services in the market, the availability and quality of trading desks and reporting facilities.

J Gdanski, CEO and founder of Evertas, said the research showed investors were keen to increase their exposure to the segment, but there were still "obviously a lot of issues in terms of the infrastructure that supports these markets".

"These clearly need to be addressed if the full potential of investment from institutional investors in cryptoassets is to be realised," Mr Gdanski said.

Evertas president and chief operating officer Raymond Zenkic added that the underlying concerns about the lack of insurance are perhaps not surprising "when insurers are only providing about $2 billion in capacity to a market that is worth between $250 billion and $300 billion."

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting mainly on banking, financial services and wealth.

Prior to joining the team in 2018, Sarah worked in commercial media and produced stories for a current affairs program on public radio.

You can contact her at [email protected].