State Street Digital Survey – Digital Asset Adoption is Here to Stay, but Knowledge Lags

Blockchain, News, Opinion | February 4, 2022 By:

State Street Digital and Oxford Economics have released their joint survey on the future of digital assets.

The survey polled 300 institutional investors in October 2021 and found that an overwhelming majority (82%) of respondents are allowed to have exposure to cryptocurrencies, with 70% looking to increase allocation this year, and 81% planning to increase allocation over the next 2-5 years. Despite this, less than half (49%) say they have a solid understanding of crypto, and even less (28%) understand crypto mining. As financial institutions look to remain bullish on this asset class, it’s clear this knowledge gap will need to tighten to ensure long-term success.

Key findings include:

  • Bitcoin continues to dominate the cryptocurrency space: Asset managers are in search of outsized gains from investing in Bitcoin—53% of respondents are interested in the cryptocurrency, and 41% of those respondents say they are exposed to Bitcoin for its potential for outsized returns
  • Asset managers are worried about cybersecurity, transparency, and regulations. Cybersecurity concerns top the list, with 44% of respondents viewing this as the top priority, compared to 41% and 39% for transparency and regulation, respectively
  • The largest institutions (by AUM) have a more sophisticated understanding of digital assets—and are far more bullish on their prospects: These organizations (with more than $500 bn in assets) are more likely to be able to hold digital assets directly (55%)
  • Custody is essential: Across the board, regardless of title, respondents are in lockstep that the responsibility for monitoring the digital asset space falls to investment staff as part of their jobs. They cite the ability to seamlessly exchange data with other industry platforms in real time (51%) as the most important quality for a custodian of digital assets

Click here to read the full survey.