Key Takeaways
- • A global study by Nickel Digital Asset Management, surveying more than 200 senior executives at institutional investors and wealth managers, finds 84% expect cryptoasset ETPs to normalize digital assets in allocation models within three years, with 26% strongly agreeing.
- • 55% of respondents say it is very likely they will use cryptoasset ETPs for the first time within two years, while 19% already use them and 23% consider them quite likely.
- • 87% predict ETP growth will increase demand for active digital asset managers and hedge funds over 24 months, with 22% expecting a significant increase.
- • Regulatory uncertainty is the top obstacle to institutional use, cited by 52% of respondents, ahead of custody risk (44%) and liquidity and trading costs (40%).
- • Multi-asset crypto baskets (45%) and actively managed digital asset ETFs (43%) are seen as the product types with the highest expected institutional growth over the next two years.
Summary
A new global study by Nickel Digital Asset Management, a London-based digital asset hedge fund manager founded by former executives from Bankers Trust, Goldman Sachs, and JPMorgan, concludes that the growing use of cryptoasset exchange-traded products (ETPs) is normalizing the inclusion of digital assets in standard portfolio allocations. The survey covered more than 200 senior executives at institutional investors and wealth managers across the U.S., UK, UAE, Germany, Switzerland, France, Italy, the Netherlands, Singapore, Brazil, and the Nordic countries.
Respondents show strong expectations for adoption and flows. According to the study, 55% are very likely to use cryptoasset ETPs for the first time, or to increase existing exposure, within two years, and more than four in five (81%) expect net inflows into digital asset ETFs to rise over the next 12 months, including 19% who foresee very significant increases. Nearly 90% say ETP growth has improved their organization's perception of the digital asset market.
The survey also points to implications for active management. Some 87% predict ETP growth will raise demand for active digital asset managers and hedge funds over 24 months. Nickel's CEO and Founding Partner, Anatoly Crachilov, argued that ETPs primarily offer passive market exposure and that rising institutional participation will increase demand for specialists able to navigate market inefficiencies, volatility, and operational complexity.
Barriers remain. Regulatory uncertainty is the largest obstacle, cited by 52%, followed by concerns that ETFs do not resolve underlying market or custody risks (44%) and liquidity and trading costs (40%). The main reason respondents cite for using ETPs is the greater ease of obtaining investment committee or board approval (28%), with liquidity and transparency (21%) and operational and custody simplification (20%) also valued. Fees or total expense ratios are critical or very important to 74%.
On regional growth, opinion was divided: 27% pointed to the U.S., 27% to Europe, and 26% to the Middle East, with only 11% choosing the UK. By product, multi-asset crypto baskets (45%) and actively managed digital asset ETFs (43%) lead expectations, followed by staking or yield-generating products (39%) and tokenized real-world asset funds (38%).
Respondents show strong expectations for adoption and flows. According to the study, 55% are very likely to use cryptoasset ETPs for the first time, or to increase existing exposure, within two years, and more than four in five (81%) expect net inflows into digital asset ETFs to rise over the next 12 months, including 19% who foresee very significant increases. Nearly 90% say ETP growth has improved their organization's perception of the digital asset market.
The survey also points to implications for active management. Some 87% predict ETP growth will raise demand for active digital asset managers and hedge funds over 24 months. Nickel's CEO and Founding Partner, Anatoly Crachilov, argued that ETPs primarily offer passive market exposure and that rising institutional participation will increase demand for specialists able to navigate market inefficiencies, volatility, and operational complexity.
Barriers remain. Regulatory uncertainty is the largest obstacle, cited by 52%, followed by concerns that ETFs do not resolve underlying market or custody risks (44%) and liquidity and trading costs (40%). The main reason respondents cite for using ETPs is the greater ease of obtaining investment committee or board approval (28%), with liquidity and transparency (21%) and operational and custody simplification (20%) also valued. Fees or total expense ratios are critical or very important to 74%.
On regional growth, opinion was divided: 27% pointed to the U.S., 27% to Europe, and 26% to the Middle East, with only 11% choosing the UK. By product, multi-asset crypto baskets (45%) and actively managed digital asset ETFs (43%) lead expectations, followed by staking or yield-generating products (39%) and tokenized real-world asset funds (38%).
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.