GDF: Institutional investors are increasingly handling Bitcoin

1 augustus 2024

Bitcoin

Institutional investors are increasingly handling Bitcoin as part of their business and looking to other digital asset opportunities, new global research from industry association Global Digital Finance (GDF) shows.

Almost all (93%) questioned say they now handle Bitcoin in some shape or form including as part of ‘testing’ the digital asset sector, the study with major finance firms in the US, Asia, Europe (including the UK) and the Middle East responsible for more than $221.75 billion assets under management found. Around 86% of those not currently handling Bitcoin plan to do so.

Financial institutions are currently most likely to be handling Bitcoin as custodians – 74% said they did so – but nearly two-thirds (67%) do so through ETFs or ETPs while 54% handle Bitcoin as part of client trading. Around a third (31%) engage with Bitcoin through brokerage and one in six (16%) as proprietary traders.

The engagement with Bitcoin applies to other digital assets. Around 87% handle Ethereum and 83% say they handle other cryptocurrencies or tokens, the research by GDF, which is focused on accelerating digital finance through the adoption of best practices and standards and engagement with regulators and policymakers, found.

Financial institutions trading Bitcoin and other cryptocurrencies are most likely to use derivatives with 40% doing so compared with 31% using spot and 39% using a combination of both.

Around 58% say they have deployed, used or handled crypto derivatives while 45% have used DeFi protocols such as Aave or Compound and one in four (25%) have deployed, used or handled NFTs.

Two out of three (66%) work with central crypto exchanges and 61% work with technical service providers while 57% work with stablecoin providers. Other firms they engage with while trading include custodians used by 47% and data service providers used by 46%. Around a third (31%) work with market makers and liquidity providers.