A new survey by KPMG shows that Canadian institutional investors increased their exposure to cryptocurrencies in 2023. The accounting firm notes that about 40% of investors claim to have had exposure to crypto assets in 2023.
This was an increase from the 31% recorded in KPMG’s 2021 report.
Canadian Crypto Investments Up in 2023
The report shows that Canadian investors have once again warmed up to cryptocurrencies following the 2022 bear market. Some of the respondents to the survey include hedge funds, families, venture capital firms, private equity, etc. KPMG reportedly received 65 responses to its survey.
About 31 of the respondents managed over $500 million in assets. The report also notes that investors now allocate 10% of their portfolios to crypto assets. These figures tally with the global change in perception of cryptocurrencies.
The crypto landscape is evolving rapidly. Explore the latest trends and projections for 2024 in KPMG in Canada's insightful report on cryptoasset adoption.
Read more: https://t.co/QWrGdRtFTj pic.twitter.com/X4BGKkG6oT
— KPMG Canada (@KPMG_Canada) April 24, 2024
Why the recent interest in crypto?
Kunal Bhasin, a KPMG representative said in a statement: Rising U.S. debt combined with increasing inflation likely provided a catalyst for the crypto rally of 2023, and it appears investors are looking for alternative asset classes that act as a debasement hedge and a reliable store of value.”
Bhasin added that “our survey findings suggest crypto assets are increasingly seen as an investable alternative asset class among such institutional investors and financial services organizations in Canada.”
The report also notes that there’s an increase in crypto derivatives. About 42% of institutions reported being exposed to these products in 2023, an increase from the 14% recorded in 2021. Canada has emerged as one of the newest hubs of crypto activities.
Cryptocurrency-focused service providers in Canada will face stricter regulatory mandates after new laws were introduced in the nation’s 2024 federal budget, announced on April 16. Crypto service providers, like exchanges and brokers, must comply with new reporting rules, pic.twitter.com/5JJaFQu3VV
— Trade Markets EU (@TradeMarketsEu) April 24, 2024
Several crypto companies and investors moved their operations to Canada following the hostilities in the US. Kareem Sadek, a co-leader of KPMG’s Digital Assets practice explained that “Canada has played a leading role in creating a regulatory environment that supports innovation in crypto assets.”
Sadek added that “those actions, along with rising prices for crypto assets, are likely reasons institutional investors have been increasingly attracted to the crypto space.”
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