Institutional Investors Predict Surge in Digital Asset Fund Launches, Research Finds

Institutional investors and wealth managers anticipate a sharp increase in digital asset fund launches, with 70% of those surveyed expecting a rise over the next 12 months, according to new research by Nickel Digital Asset Management. 92% of respondents also foresee traditional financial institutions entering the sector with their own funds, driven in part by Blackrock’s successful BUIDL fund. Industry leaders predict this trend will transform the landscape for digital assets.

Surging Interest in Digital Asset Funds Driven by Institutional Investors, Research Shows

Nickel Digital Asset Management published its research on Thursday detailing that institutional investors and wealth managers foresee a substantial increase in the launch of digital asset funds. According to the research:

Around 70% questioned predict a rise in digital asset focused fund launches in the next 12 months compared with the last 12 months with one in seven (14%) forecasting dramatic growth, the study with organisations invested in the digital assets sector found.

Additionally, 92% of respondents expect traditional financial institutions to enter the sector by launching their own funds.

The research highlighted that the growing trend will coincide with increasing participation from traditional financial institutions. “The growth in fund launches will be accompanied by growing engagement in the digital assets sectors by traditional financial institutions, Nickel’s research with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $1.7 trillion in assets, shows.”

A significant factor influencing this surge is the success of BlackRock’s BUIDL fund. “Up to 93% questioned believe the number of traditional firms launching funds in the sector will increase over the next three years with 38% predicting a dramatic increase.” BlackRock’s BUIDL fund, launched on the Ethereum network in March, has achieved $500 million in assets under management (AUM). Respondents anticipate it will grow significantly, with 95% predicting it will reach $10 billion by 2025.

Anatoly Crachilov, Nickel Digital’s CEO, commented:

As the digital asset sector evolves and new funds come to market, it’s clear that institutional investors are driving this expansion.

What do you think about the growing trend of digital asset funds and traditional financial institutions entering this space? Let us know in the comments section below.