Last updated: 11:55 / Tuesday, 5 July 2022
Report by Nickel Digital

US Wealth Managers "face pressure" to Advise on Crypto Assets

  • Half of US professional investors worry that Germany and the UAE have taken the lead on regulation
  • Two out of five US investors expect the regulatory framework to improve helping to drive institutional asset allocations

A new study from London-based Nickel Digital Asset Management shows professional investors in the US expect wealth managers to come under increasing pressure to advise on crypto/digital assets.

Nickel commissioned research with professional investors in the US who collectively manage around $116.13 billion in assets, which found two-thirds (67%) believe wealth managers will face increasing pressure from high-net-worth clients to offer crypto and digital solutions over the next two years.

One in five believe they will face significantly more pressure to provide advice with 65% warning that wealth managers will risk losing business if they do not respond to demand.

Similar pressure for advice and education will come from pension fund trustees – 60% of investors believe the level of advice they want will increase over the next two years.

The investors, who work for institutional investors, wealth managers, fund managers and hedge funds, are increasingly optimistic about the crypto regulatory framework over the next two years with 38% expecting an improvement.

Around a fifth believe there will be a rise in the number of crypto/digital investment funds being launched over the next two years while more than half (58%) predict pension funds and other institutions will increase allocations.

Fiona King, Managing Director, Institutional Sales, at Nickel Digital, said: “US investors expect investment strategies around digital assets to develop rapidly and are optimistic about regulatory change. Since our business was formed in 2018, we have launched four distinct digital asset funds, and are looking to develop more products to cater to our client’s needs.

Nickel’s research found strong support for digital assets among US investors – three-quarters (75%) questioned believe they will become mainstream assets while 73% believe that digital assets – in particular DeFi protocols - are emerging as an important disruptive technology for traditional finance.

When asked for their main overarching view on blockchain and digital asset technology, 37% of professional investors said it is scalable and, on the way, to achieving mainstream adoption, while 23% said it bears strong transformative potential for the global economy