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companies will invest more in bitcoin if “reputable companies” offer custody

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Key facts:
  • Institutional investors are very interested in tokenized assets.

  • Despite the negative market, investors maintain their plans on digital assets.

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At least 190 institutional investors are willing to increase their exposure to bitcoin (BTC) and other cryptocurrencies if only “recognized and trusted” financial institutions will offer custodial services.

This is determined by the most recent report of U.S. bank BNY Mellon, the longest-running bank in the United States, which was responsible for a survey of more than 270 institutional investors. These include asset owners, asset managers, and hedge funds.

According to the survey results, 70% of respondents said that custody and transaction execution are important to them. This is because. they admit that they are comfortable with traditional custodial services.

BNY Mellon points out that. 63% of respondents feel safe trading tokenized assets through traditional institutions. “Of these, 91% expressed interest in investing in this type of product.

The bank suggests that investors surveyed appreciate the fact that tokenized assets eliminate “the friction of securities transfers,” as well as “increase access for retail investors.”

So much so that almost all investors surveyed agree that. Tokenization “will revolutionize asset management and will be good for the industry.”

BNY Mellon points out that private equity and hedge funds are the assets that investors surveyed would most like to see tokenized, in part, because of the demand for protection against inflation.

Over 70% of institutional investors would bet on cryptocurrencies if self-custody services were offered by a “recognized” institution. Source: BNY Mellon.

“Investors’ minds are changing.”

The oldest bank in the United States, a longtime friend of the investment ecosystem, is Bitcoinpointed out that. nearly 90 percent of institutional investors will carry out their investment plans in digital assets. This is despite the bear market (cryptocurrency), which has been in effect for most of 2022.

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This trend is in line with the results of a survey conducted by analyst firm Fidelity Digital Assets, which shows that more than 800 institutional investors from a variety of sectors are willing to invest in bitcoin and cryptocurrencies, including with the bear market.

According to BNY Mellon, investors’ minds “are changing” and some are “ready to imagine a world in which up to a third of their portfolios will contain digital assets.”

In fact, BNY Mellon found that 35 percent of respondents, or just over 95 investors, are users of custodian banks and other traditional services to manage digital assets.

“This suggests the need to support hybrid portfolios that combine traditional and digital assets,” the bank said. It added that integrating the old with the new “is an appropriate task for traditional finance.”

The vast majority of investors surveyed by BNY Mellon are interested in tokenized products. Source: BNY Mellon.

According to the institute, traditional finance has “firmly established tracks, supported by robust and often mandatory compliance, regulatory, IT and capital processes. This puts these entities in an enviable position to continue to build market share.”

Digital cash meets market needs

According to BNY Mellon’s survey, most institutional investors are comfortable with digital cash. Of these, 88 percent approve of the use of digital cash. stable currencieswhich are digital representations of cash using technologies based on blockchain To find parity with the U.S. dollar.

For the U.S. bank, therefore, “digital cash fills a need in the marketplace,” although they acknowledge the existence of concerns in this regardparticularly with regard to currency interoperability, security risks, and lack of solutions.

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