ETP Growth Fuels Demand for Active Crypto Managers

According to a recent survey conducted by Nickel Digital Asset Management, 87% of institutional investors and wealth managers expect the growth in crypto ETPs (Exchange-Traded Products) to boost demand for active digital asset managers and hedge funds over the next two years. The research, which involved more than 200 senior executives from institutions across various countries, found that 55% of respondents are likely to use crypto ETPs for the first time within the next 24 months.

The survey also revealed that nearly four-fifths (81%) of institutional investors expect net flows into digital asset ETFs to increase over the next 12 months. Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, stated, 'Crypto ETPs are becoming an important bridge between traditional finance and digital assets.' However, he also noted that growth in ETPs has had a positive impact on their organization's view of the digital asset sector.

Regulatory uncertainty remains the biggest barrier to increased institutional use of crypto ETPs, with 52% of respondents citing this as a concern. Other challenges mentioned include market or custody risks (44%), liquidity and trading costs (40%), and fees or TERs (74%).