The growing number of startups offering crypto investment services will be buoyed by news that institutional investors are set to increase the amount of capital they spend on crypto assets.
According to research from crypto-asset insurance firm Evertas, more than a quarter (26%) of pension funds, insurers and family offices are expected to "dramatically increase" their level of investment in crypto assets over the next five years.
The research also found that a further 64% anticipate a "slight" rise in allocation. For hedge funds, the dramatic increase is expected by an even larger percentage (32%).
When quizzed on the reasons for the change in crypto investment levels, 84% of respondents cited a likely imporvement in rewgulaotry infrastructure. A similar number (80%) pointed to the growth of the crypto market and an increase in liquidity, making it easier for investors to buy and sell their crypto holdings.
However, the arrival of more institutional investors such as pension funds in the crypto market will also bring additional concerns about security and reliabity. Consequently, Evertas president Raymond Zenkich has called for greater take-up of specialist insurance policies designed for the crypto market.
“A lack of adequate insurance for the crypto-assets market is clearly top of the list of concerns for many institutional investors, which is perhaps not surprising when insurers are only providing capacity of around $2 billion for a market that is worth between $250 billion and $300 million," said Zenkich. "We are working closely with the insurance community to address this issue.”