Canadian Institutional Investors Massively Adopt Cryptocurrencies

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A survey conducted by a Canadian firm reveals that the interest of Canadian institutional investors in cryptocurrencies has seen a significant surge over the past two years. Estimated at 29% in 2021, the proportion of institutional investors exposed to cryptos in Canada has risen to 75% in 2023. Executives from the firm discuss the factors that justify this trend.

Canada, a Crypto Hub

From 2021 to 2023, Canada experienced a significant explosion of institutional investor interest in cryptocurrencies. This is according to the “Institutional Adoption of Cryptoassets” report published by the accounting firm KPMG Canada on April 24th.

According to the report, 39% of institutional investors were directly or indirectly exposed to cryptocurrencies in 2023 compared to 31% in 2021. Likewise, the number of institutional investors who allocated at least 10% of their portfolios to cryptos was 33.33% in 2023, versus 20% in 2021.

In terms of financial services companies, the survey revealed that 50% of them were offering crypto services in 2023, up from 41% in 2021. Kunal Bhasin, partner and crypto leader at KPMG Canada, explains why there was such a significant leap in institutional interest for crypto assets in 2023.

Cryptos Emerging as Hedge Assets in Canada

Kunal Bhasin attributes the growth in institutional interest in cryptos in Canada in 2023 to the increase in inflation rates and the soaring American debt. He notes that Canadian institutions are seeking alternative assets that can act as a store of value and offer a hedge against inflation.

The expert also points out that this trend has been encouraged by a number of factors. Among others, he mentions the maturation of the crypto markets and custody infrastructure, and the increased demand for crypto services following the catalyst provided by BTC ETFs.

However, Canada’s rise in the crypto ecosystem is not entirely independent of regulatory parameters. Indeed, several crypto firms had to move their operations from the USA to Canada in 2023 to escape the regulatory pressure prevailing in the USA.

Even the renowned Coinbase extended its presence to Canada to benefit from the more lenient Canadian regulations compared to those of the USA. The maturation of the cryptocurrency market continues slowly but surely.