September 25, 2022

Goldman Sachs Reveals Increase in Institutional Crypto Adoption

One of the most renowned financial institutions all over the world, Goldman Sachs conducted its annual survey of the crypto industry recently, which is the 11th it has done so far. This involved looking into some of the world’s biggest asset managers and the results of the survey indicated that most of them regard cryptocurrency as an excellent investment.

Insurance Industry is Interested in Crypto

It was the first survey conducted by Goldman Sachs into the insurance industry that included reviewing its response to the crypto industry. Like many other industries, the insurance sector has been keeping a close eye on the crypto industry since last year. As a matter of fact, MassMutual Insurance had even disclosed investing in Bitcoin worth a $100 million back in December 2020.

Even though it is not the majority of insurance companies that have expressed in interest, it should be noted that those based in the United States were certainly more open to it than their counterparts. There are about 11% of the insurance firm in the US that have already made investments in crypto, or are considering doing so. In comparison, only 6% of Asian insurance companies fall in this category and even lower in Europe. Nonetheless, the survey concluded that such an interest was still quite impressive.

Moreover, it should also be noted that the survey did take into account the macroeconomic factors that have an impact on the global crypto landscape. These include yield generation, investment fears, inflation and Environmental,Social and Governance (ESG).

Response of survey participants

6% of the participants in the survey disclosed that they believe crypto has the potential of offering some of the highest returns possible in the coming year. 9% of the survey participants also considered crypto to be one of the top asset classes. However, 16% of the respondents did not share the same sentiment, as they believed the asset class will offer low returns. When asked about downsizing and expanding their crypto investments, there were 7% who said that they would stick to the current investments and not allocate more of their portfolio. But, there was 1% that did want to expand their crypto portfolio.

Survey results come as a surprise

Matthew McDermott, Goldman Sachs’ head of Digital Assets said that the results of the survey were quite surprising. He said that the pace of crypto adoption globally had come off as a surprise. The executive went on to say that the rate at which crypto was being adopted by global asset managers was evidence of the industry’s potential.

McDermott stated that with the rapid growth and expansion of the crypto market and the potential of regulatory certainty, a greater number of institutions are taking an interest in exploring the opportunities this market has to offer. Furthermore, they are also beginning to understand the potential of the blockchain technology that powers these cryptocurrencies. The rising inflation rate had also driven people to look into the crypto market and numerous new ventures have been launched consequently.

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