Leading edge: A visual representation of the virtual currency bitcoin. The key reasons for Singaporeans increasing their crypto investments are portfolio diversification and yield generation. — AFP
SINGAPORE: Professional and institutional investors in Singapore are looking to make cryptocurrency a bigger part of their portfolios in 2025, buoyed by better sentiments.
A poll by Singapore and Zurich-based digital asset banking group Sygnum released on Nov 14 found that more than half, or 57%, of the 121 Singapore-based respondents intend to raise their crypto allocations.
This is higher than the global average of 47%.
About 65% of the Singapore-based participants said they have greater risk appetite for cryptocurrencies.
The key reasons for increasing their crypto investments are the long-term investment case for digital assets and blockchain technology, portfolio diversification and yield generation.
The survey also found that the crypto industry’s lack of regulatory clarity is no longer a top barrier to entry for Singapore investors.
Only 30% of respondents chose this as a primary barrier, compared with 45% who cited security and custody concerns.
Custody refers to the methods used to protect crypto assets from threats such as scammers and hackers.
The Future Finance 2024 survey found that 27% of professional and institutional investors based in Singapore plan to hold on to their current digital asset strategies, while 2.5% have plans to lower crypto holdings.
The poll was conducted at the end of the third quarter of 2024 on more than 400 global participants.
These include banks, hedge funds, multi and single-family offices and asset managers from places such as Switzerland, the United Kingdom and Thailand.
The survey, which is into its second edition, looked at the core interests, market sentiment and behaviour of this non-retail group of investors.
Of those based in Singapore, 37% said the availability of institutional-grade products is a reason for them to up their crypto allocations.
The poll also found that more Singapore investors want better quality information and to have a deeper understanding of digital assets compared with their global peers.
These participants noted that regulatory clarity has improved but said security and custody worries are now the greatest barriers to institutional crypto adoption in Singapore.
In terms of investment areas, Singapore investors are most interested in Layer-1 solutions and Web3 infrastructure.
Layer-1 refers to a base blockchain network like bitcoin or ethereum, while Web3 is the next iteration of the Internet that is built on blockchain technology.
These investors also believe that mutual funds, corporate bonds, equity and hedge funds have the greatest tokenisation potential.
Gerald Goh, co-founder and Asia-Pacific chief executive of Sygnum, said: “2024 was full of positive new developments and watershed moments for crypto and the broader digital asset ecosystem.
“Among the most important are perhaps the United States Securities and Exchange Commission’s approval and the subsequent launch of bitcoin exchange-traded funds, which massively accelerated institutional adoption of digital assets.”
Globally, the survey found that traditional investors hold a confident view of the crypto market’s long-term potential.
In the shorter term, investors have turned bullish on crypto despite concerns about geopolitical tensions – thanks to US president-elect Donald Trump.
Bitcoin, the world’s most popular digital asset, has shot past US$89,000, jumping about 30% since the US election on Nov 5 to hit US$89,599 on Nov 12.
Traders are betting that the digital asset industry will do well under the new leader, who has promised to set up a strategic US bitcoin stockpile and boost domestic mining of the token.
Some analysts see bitcoin hitting the US$100,000 milestone by the end of 2024. — The Straits Times/ANN
