While more than half (57 per cent) of institutional investors got into crypto assets between 2020 and 2021, most investments were small with 71 per cent allocating less than two per cent of their portfolios to the asset class, according to a new survey by KPMG in Canada and the Canadian Association of Alternative Strategies and Assets.
A third (32 per cent) of respondents said they have direct or indirect exposure to crypto assets, with 50 per cent having exposure through exchange-traded funds, close-ended trusts or other regulation products, followed by exposure to crypto-related public equities (36 per cent), direct crypto assets (29 per cent) and as a limited partner in a venture capital or hedge fund (29 per cent).
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“Institutional investors are increasingly adding exposure to crypto assets to further diversify their portfolios given the reduced ability of government bonds to act as portfolio shock absorbers,” said Chris Farkas, a partner and national financial services consulting leader for asset management at KPMG in Canada, in a press release. “While this is a newer and potentially promising space for institutional investors, they’re clearly taking a prudent approach.”