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Crypto adoption for both institutional and retail investors in Eurozone countries is on the rise

A recent survey published by the European Central Bank (ECB) shows that more than half of institutions have some exposure to crypto-assets while around 1 in 10 households have invested in digital currencies.

Image by Eugenio Cuppone from Pixabay

Fri, 27 May 2022, 08:23 am UTC

The crypto market rally last year pushed the prices of popular coins such as Bitcoin (BTC) and Ethereum (ETH) to new all-time highs making them more attractive to investors. A recent survey published by the European Central Bank (ECB) shows that more than half of institutions have some exposure to crypto-assets and around 1 in 10 households have invested in digital currencies indicating increased demand from retail investors as well.

In a report released on Tuesday, the European Central Bank revealed that crypto demand from institutional investors has risen in 2021. “For example, 56% of European institutional investors surveyed by custody and execution services provider Fidelity Digital Assetsindicated that they have some level of exposure to digital assets,” the ECB wrote.

The recent data represents a significant rise from the 45 percent of institutions that reported crypto exposure in 2020. What is even more interesting is institutions’ intention to invest is also trending upwards.

The ECB offered a number of factors that might have contributed to the increase in demand for crypto assets by institutional investors. These include the “increasing availability of crypto-based derivatives and securities on regulated exchanges, such as futures, exchange-traded notes, exchange-traded funds and OTC-traded trusts, which have increased in popularity over the last few years in Europe and the United States.”

In addition, institutions might have interpreted increased regulation as some indications that authorities have somewhat endorsed crypto assets. “For example, since July 2021 German institutional investment funds have been allowed to invest up to 20% of their holdings in crypto-assets,” the regulator added.

ECB’s report also pointed out an increase in crypto adoption among retail investors. “Retail investors represent a significant part of the crypto-asset investor base,” the regulator wrote. “Recent results from the ECB’s Consumer Expectation Survey (CES) for six large euro area countries indicate, based on experimental questions, that as many as 10% of households may own crypto-assets.”

Six percent of the crypto-owning households said they held worth more than €30,000 in crypto-assets around $32,037, according to Cointelegraph. ). Around 37 percent of the group said they own up to 999 euros ($1066) in crypto.

“On average, young adult males and highly educated respondents were more likely to invest in crypto-assets in the countries surveyed,” the ECB noted. “With regard to financial literacy, respondents who scored either at the top level or the bottom level in terms of financial literacy scores were highly likely to hold crypto-assets.”

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