Crypto investing: asset managers have left the starting block

Asset managers are diving into the rapidly evolving world of blockchain technologies — crypto currencies, digital assets and smart contracts — and are progressing faster than expected.

The global crypto market cap roughly tripled in 2021, at one point nearing $3 trillion. The market continues to swing wildly but, at $1.28 trillion, has still added almost $1 trillion in overall market value since 2020. This growth is fueled by venture capital, $32.8 billion of which went into startups in the crypto and blockchain technology sector in 2021. And, as investors build crypto-asset portfolios globally, hundreds of custodians are beginning to offer digital asset solutions. As lawmakers and regulators scramble to address the risks involved, the drumbeat for including crypto assets in a diversified investment portfolio has gotten louder.

Asset managers might be forgiven for thinking their peers have not yet grasped the implications of these new assets and technologies. This survey research report details how close asset managers are to offering crypto-focused products and strategies, and managing the investment process. It also highlights the extent to which asset managers have embraced decentralised finance (DeFi) in their investment operations. WatersTechnology’s research reveals that asset managers are further along than some might realise.