Institutional investors predict surge in digital asset funds

Institutional investors and wealth managers are predicting a substantial increase in digital asset fund launches over the next 12 months, according to new research by Nickel Digital Asset Management.

The study shows that 70% of respondents expect a rise in digital asset-focused fund launches within the next year, while 14% foresee dramatic growth in this area.

Additionally, 92% of those surveyed anticipate traditional financial institutions entering the sector by launching their own funds.

The research noted, “The growth in fund launches will be accompanied by growing engagement in the digital assets sectors by traditional financial institutions.”

These respondents represent institutions from the U.S., U.K., Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates, collectively managing approximately $1.7 trillion in assets.

A significant factor driving this surge is the success of BlackRock’s BUIDL fund.

The research highlighted, “Up to 93% questioned believe the number of traditional firms launching funds in the sector will increase over the next three years, with 38% predicting a dramatic increase.”

Launched on the Ethereum (CRYPTO:ETH) network in March, BlackRock’s BUIDL fund has already amassed $500 million in assets under management (AUM).

Respondents further anticipate its growth, with 95% predicting it will reach $10 billion by 2025.

Anatoly Crachilov, CEO of Nickel Digital Asset Management, commented on the findings, stating, "As the digital asset sector evolves and new funds come to market, it’s clear that institutional investors are driving this expansion."