2022 Could See Widespread Crypto Adoption by Financial Services Firms

Over the past two years, financial services companies – such as Purpose Investments, Fidelity Investments, Mackenzie Investments and CI Financial Corp. – have merged services related to crypto assets into their existing lines of business, issuing ETFs, offering advice on wealth management, custody, fund administration, compliance, clearing and market making.

Sadek was referring to a survey conducted last fall by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA).

Of the 75 responses received from KPMG clients and CAASA members in the survey, 32% of institutional investors surveyed indicated that they had direct or indirect exposure to cryptoassets.

In terms of crypto asset types: 50% said they were exposed through ETFs, closed-end trusts or other regulated products; 36% said they had exposure to public crypto-related stocks; 29% said they directly own crypto assets; and 29% said they had invested as a limited partner in a venture capital or hedge fund.

Among institutional investors surveyed, 57% said they had initially invested in crypto assets between 2020 and 2021. However, most investments were quite small, with 71% of respondents allocating less than 2% of their portfolio to the asset class .

When it comes to financial services respondents, 39% indicated that they offer crypto-asset services, with 42% offering wealth management services or financial advice in the space. In addition, 33% said they offer custodial, clearing or settlement services; 22% issue ETFs or other regulated products, and 11% said they provide liquidity for regulated products as a market maker.

“Institutional investors are increasingly adding exposure to crypto assets to further diversify their portfolios given the reduced ability of government bonds to act as portfolio buffers,” said Chris Farkas, Partner, National Advisory Leader in financial services for asset management, KPMG in Canada, in the press release. “While this is a newer and potentially promising space for institutional investors, they are clearly taking a cautious approach.”

In an additional survey by KPMG in Canada of more than 1,000 Canadians, 13% of respondents said they bought Bitcoin or Ethereum directly, while 11% bought Bitcoin ETFs or other crypto-asset funds.

Canadians between the ages of 18 and 24 were the most likely to engage in the space, as 24% of respondents in this cohort said they purchased crypto assets like Bitcoin or Ethereum directly. Additionally, 20% of respondents in this age bracket have purchased Bitcoin ETFs or other crypto asset funds.

Respondents in the 55-64 age bracket were the least likely to buy cryptocurrencies and crypto funds.

However, the poll also revealed that there is a degree of interest among different age groups of Canadians. At the bottom of the scale, 10% of Canadians between the ages of 55 and 64 said they were interested in buying cryptocurrency, and 15% said they were intrigued by the idea of ​​buying cryptocurrency funds. crypto assets.

The poll was conducted between February 14 and 16 on Schlesinger Group’s Asking Canadians panel via the online research platform Methodify. The KPMG in Canada and CAASA survey was conducted between August 30 and October 31, 2021.