A recent study by OKX has revealed that institutional investors view the adoption of cryptocurrencies as “inevitable” and are planning to increase their crypto allocations in the short to medium term.
The study, titled *Digital Assets as the New Alternative for Institutional Investors*, was commissioned by OKX and conducted by Economist Impact. It explored key areas such as asset allocation, custody, regulation, and risk management, with a particular focus on institutional investors considering digital assets like cryptocurrencies. The research also delved into liquidity, market integration, and regulatory compliance.
Insights were gathered through interviews with leaders in digital assets and finance from institutions like Citi, Al Mal Capital, Skybridge Capital, and VanEck. The study concluded that institutional investors see digital assets as a promising asset class that is poised for significant growth.
OKX is one of the world’s leading cryptocurrency exchanges, with a daily spot trading volume exceeding $2 billion, comparable to that of Coinbase. Primarily known for its derivatives trading, OKX handles over $18 billion in monthly volume in futures trading, second only to Binance.
Founded in 2017 in China by Star Xu, OKX quickly expanded internationally. Following China’s crypto ban, the company ceased operations in its home country and extended its reach globally. Its registered office is in the Seychelles, with operational headquarters in Dubai and additional offices in Singapore, Hong Kong, the USA, and the Bahamas.
OKX offers over 700 spot trading pairs and more than 280 derivative instruments, with leverage up to 125x on major futures contracts. It also provides specialized trading solutions for institutional investors, including advanced features, custody options, and risk management tools. Through its Nitro Spreads service, OKX Institutional offers on-demand access to deep liquidity for executing basis strategies, future spreads, and funding rate arbitrage.
Institutional Investors
The research identified four critical areas of interest for institutions considering digital assets: asset allocation, custody, regulation, and risk management. Additional factors influencing their entry into the crypto market include liquidity, market integration, and compliance.
Notably, the research found a growing consensus among institutional investors that digital assets—including cryptocurrencies, NFTs, and tokenized private funds—will play a significant role in their future portfolio allocations. In fact, 69% of institutional investors plan to increase their allocations in digital assets and related products within the next two to three years.
Currently, the average allocation to digital assets ranges between 1% and 5%, but this is expected to rise to 7.2% by 2027. To achieve this, investors are considering strategies such as spot allocations in cryptocurrencies (favored by 51% of surveyed investors), staking digital assets (33%), and investing in crypto derivatives (32%). While the report includes all digital assets, these strategies are primarily focused on cryptocurrencies.
The Institutional Crypto Market
The institutional custody market for digital assets is projected to grow at a compound annual growth rate of over 23% until 2028, reflecting strong interest from institutional investors. Currently, 80% of hedge funds investing in digital assets use third-party custodians.
The study also highlighted the convergence of local and regional regulatory frameworks, such as the EU’s MiCA, which is paving the way for global cryptocurrency adoption. Additionally, crypto exchanges are increasingly recognizing the need to adapt to local regulatory requirements to balance growth with market integrity.
Commentary
Lennix Lai, Chief Commercial Officer of OKX, stated:
“This initiative to engage with the world’s leading institutional investors demonstrates how rapidly digital assets are being integrated into investment portfolios. The trend will only intensify with advancements in blockchain technology, increased regulatory clarity, and the adoption of innovative digital solutions like real-world tokenized assets. Our collaboration with Economist Impact underscores OKX’s commitment to fostering a deeper understanding and adoption of digital assets among institutional investors globally.”
John Ferguson, Head of Globalization, Trade, and Finance at Economist Impact, added:
“As digital assets gain prominence in financial markets, regulatory standardization and sophisticated custody and risk management solutions tailored to digital assets are crucial for institutional investors. This research, sponsored by OKX and developed by Economist Impact, aims to provide insights into recent trends, challenges, and emerging opportunities in digital assets as investors navigate this rapidly evolving ecosystem. The findings also emphasize the vital role technology-based solutions can play in building trust in digital assets among institutional investors.”
Source: en.cryptonomist.ch
