Investment: 62% of investors will add crypto to portfolios

The Financial Services Authority in Malta has given the go-ahead for a cryptocurrency asset index fund for listing on Malta’s national Stock Exchange.

The asset manager Iconic Funds has announced that it will be listing its BITA20 XA Crypto Asset Index Fund on the exchange within the next few days and that the fund will be enabling direct exposure to cryptocurrencies if eligible citizens would like to add crypto assets to their portfolios. The fund holds an investment in the top leading 20 cryptocurrencies. As it stands, the fund will only be available to individuals who qualify to invest, and it will not be open to the general public.

While investors in European markets have not been missing on cryptocurrency investment, a regulated market in the space offering more assets than Bitcoin will generate more exposure for the industry with increased trust and national support.

Last year, cryptocurrency-linked exchange-traded products in Europe surpassed €1 billion EUR in assets in assets. That level of cryptocurrency investment represents a strong level of growth and adoption for the industry and signifies the rate of trust that investors are starting to place in the cryptocurrency market; a space that has been suffering from a reputation of volatility.

According to the CEO of Iconic Funds Patrick Lowry, the move towards offering investors greater ways to buy and hold cryptocurrencies comes at a time when the industry is watching the Bitcoin ETF and regulation surrounding the United States and Bitcoin. As he said:

While the crypto world seems hyper-focused on the ever-elusive spot Bitcoin ETF, we decided to stay ahead of the curve and list the Iconic BITA20 XA Crypto AssetIndex Fund on a regulated market in Europe. Investors are actively seeking access to crypto beyond just Bitcoin, and we hope our fund’s listing gives professional investors more opportunity to gain exposure to the crypto market.”

Iconic Funds has already shown support for a Bitcoin ETF product on the German stock exchange in Frankfurt and Deutsche Boerse’s virtual asset stock exchange. This new index fund has been touted as the first to offer investors exposure to cryptocurrencies through a regulated platform.

Iconic Funds research into crypto investors

Earlier this month, Iconic Funds along with Cryptology Asset Group released a report looking at how the past year with the pandemic and the explosion of cryptocurrency assets has impacted investment portfolios. According to the research, the offering of cryptocurrency investment has had a positive effect on how investment portfolios have performed over the past year looking at investments across several asset allocation models and classes.

Iconic Funds found that adding cryptocurrency to an investment fund improves the profitability of diverse portfolios. This was found despite any volatility including the crash that occurred last March and the recent crash in May. The study considered a risk-reward overview and measured how changes took place in portfolios related to earning and losses in portfolios that included cryptocurrency. The study noted:

This report finds that the addition of cryptocurrencies to any portfolio covered had a positive impact on the returns as well as the risk-reward performance of the portfolio. This finding holds despite a significant correction in the crypto markets during the beginning of 2021. Furthermore, the addition of more cryptocurrencies led to even higher returns.”

A month prior to the investment report, Nickel Digital Asset Management estimated that over 60% of global institutional investors with no previous cryptocurrency exposure will start adding cryptocurrency and blockchain-related investments into their holdings over the next year. According to Nickel, which took data from wealth managers and investment managers across the globe, the main reason investors would opt to add cryptocurrency to their portfolios would be to increase capital over the long-term – with 47% of the survey respondents offering this as the reason. Further, 44% of respondents pointed that growing adoption and confidence in an asset class will generate more interest in investing in cryptocurrency.

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