How investors strategically shape their crypto portfolios
Sygnum’s institutional investor crypto survey report, Future Finance 23, confirms a strong preference for well-established crypto assets which are perceived as less volatile. In this excerpt of the report, we focus on preferred crypto assets and investment strategies.
What type of crypto assets do you currently invest in?
- 87 percent of respondents invest in blockchain protocol tokens like Bitcoin, Ethereum and Solana (Layer 1 protocols). This reflects a strong preference for well-established crypto assets which are perceived to be less volatile. This also signals a strong interest in smart contract platforms which form the infrastructure for blockchain-based ecosystems and applications.
- This research indicates the use of a diverse range of portfolio compositions and investment strategies. For example, more than half invest in decentralised application (dApp) tokens, over a third in stablecoins and a quarter in NFTs. Additionally, only 20 percent of respondents invest solely in blockchain protocol tokens.
- The dominance of protocol tokens, and to a lesser extent dApp tokens, is driven by their name recognition, accessibility and yield opportunities such as staking on Proof of Stake (PoS) chains.
- Stablecoins remain relatively popular (36 percent) due to their non-volatility and use as a hedge and an on-and-off ramp.
- Tokenised assets and private company-issued tokens reflect low current liquidity but could potentially increase as the number of use-cases and issuances grows.
What percentage of your portfolio is currently allocated to crypto assets?
Crypto allocation percentages vary significantly based on two factors: investor type and portfolio compositions. Institutional investors have more conservative holdings in contrast to High Net Worth Individuals (HNWI) or Distributed Ledger Technology (DLT) and crypto foundations.
What best describes your crypto asset investment strategy?
- Single token exposure (43 percent) is the most preferred investment strategy. This indicates a strong conviction in the potential to generate alpha from specific tokens, likely driven by the established market presence of major assets such as Bitcoin and Ethereum.
- Actively managed exposure (30 percent) may provide more market flexibility and outperformance potential, while yield generation (30 percent) shows interest in passive income streams for those putting large amounts of idle capital to work via staking and structured products.
- However, the data suggests a relatively diverse spread of strategies, that includes passive market exposure (23 percent), sector exposure (19 percent) and venture capital (19 percent). These strategies could be employed by distinct investor types with different meta allocation amounts, hence warranting further analysis.
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Disclaimer
This document is purely for educational purposes and has been issued by Sygnum Group. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication. It does not constitute an offer or a recommendation to subscribe, purchase, sell or hold any security or financial instrument. It contains the opinions of Sygnum Group, as at the date of issue. These opinions and the information contained herein do not take into account an individual‘s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes personalized investment advice to any investor. Therefore, you must verify the above and all other information provided in the document or otherwise review it with your external advisors. Some investment products and services, including custody, may be subject to legal restrictions or may not be available worldwide on an unrestricted basis. The information and analysis contained herein are based on sources considered as reliable. Sygnum Group uses its best efforts to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this document. Nevertheless, all information indicated herein may change without notice.
