Binance Research surveyed 76 institutional investors to glean insights on the funds and their views on the space. 35% of respondents invested more than 80% of their portfolio in cryptoassets with the majority involved in broader asset classes. More than half of the funds had less than $1 million allocated to crypto while 4% had more than $25 million. Despite the rapid growth of the crypto loan markets, only 25% indicated they were engaged in lending or borrowing while 56% staked.
Why it matters:
While hundreds of crypto funds emerged in the last bull market, the total allocation in crypto remains small. This survey is generally in line with data from PwC that found the median assets under management of crypto funds is $4 million. The emergence of more institutional-grade products could be a catalyst for larger funds to begin allocating capital to crypto.
The desire for yield manifesting in staking rather than borrowing has implications for proof-of-stake assets. These networks will have increasingly centralized validator sets since over half of the investment funds opt to stake through exchanges.