KPMG Canada representative Kunal Bhasin recently claimed that increasing debt and inflation are two main reasons for crypto investments. The analyst noted that institutional investors based out of the region have increased their crypto exposure by a considerable amount since last year in comparison to previous bull runs.
KPMG Survey
These statistics have been issued by an accounting firm named KPMG. The report indicates that around 39% of commercial investors hailing from the region have direct or indirect exposure to digital assets for 2023. The number has increased by 31% since the study conducted for the same in 2021 as per KPMG. The latest report was published on 24th April, 2024.
To participate in the survey, around 65 respondents reached out to KPMG out of which 31 were institutional investors that contained minimum AUM of $500 million. On the other hand, the remainder of the 34 investors hailed from financial service organizations.
The report further noticed that about one-third of the institutional investors allocated around 10% of more of their investment portfolios to digital assets. This number was limited to only fifth part until two years ago.
Entry of Institutional Investors in the Digital Assets Sector
As per Bhasin, the leader and partner at KPMG Canada Digital Asset practice, the firms are looking to invest in alternative asset classes that work are in alternative asset classes acting as debasement hedge and viable store of value. Institutional investors are opting for digital assets as a way to counter inflation and inceasing debt problem in the United States.
A major portion of investors noticed that maturing markets and better custodial infrastructure are key reasons for investing in digital assets. Additionally, a major factor for a visible rise in demand for digital asset services was attributed to traditional financial firms expanding their offerings.
The approval of the first spot Bitcoin and Ethereum ETFs in February 2021 enabled local investors to become more attracted to the digital assets as per another KPMG executive.
However, the recent approval of Bitcoin ETFs in the United States has marked a major milestone moment for a multitude of investors in the North American nation. The report insinuated that about 50% of surveyed institutional investors have exposure to Canada-based ETFs, close-ended trusts, or other regulated funds.
In contrast, around 58% had exposure via stock market such as Galaxy Digital listed on the Toronto Stock Exchange that has been up by 36% in 2021.
Digital Asset Derivatives
The institutional investors hailing from Canada have received exposure in digital assets through the derivatives markets. The total institutional stake invested in digital asset derivatives now stands at 42% in comparison to 4% in 2021. Meahwhile, there is a decline in terms of venture capital or hedge fund firms that have fallen to 25% in 2021 from 29%.
Another Cointelegraph report indicated that Australia has become the latest country to become the 1000 Bitcoin ATM alongside the USA and Canada. The US completed the first 1000 digital asset ATMs milestone in November 2017.
On the other hand, Canada completed the same feat in January 2021. It is now Australia to has crossed the same threshold with a total of 1000 ATMs now operational in the region.
On 24th April, Australia hosted a network of 1002 Bitcoin ATMs. The region now accounts for 2.7% of the global Bitcoin ATM network. As per Coin ATM Radar, the US houses around 82.8% of the total global Bitcoin ATMs with a total of 31,170 units.
On the other hand, Canada accounts for 7.8% of total international digital asset ATMs with 2918 units. The rise of digital asset ATMs in Australia has undergone an exponential rise till the conclusion of 2022.
In April 2023, Australian Bitcoin ATMs quantity increased in comparison to Asia. This was inclusive of major economic regions such as Japan, India, Singapore, and China. At the existing installation rate, Australia is poised to get a leg ahead of Europe that currently stands at 4.3% or 1,617 active Bitcoin ATMs.
