A recent survey by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA) shows a notable increase in the adoption of cryptoasset products and services by financial organizations and institutional investors in Canada.
Crypto’s acceptance in Canada’s financial sector
According to the bi-annual survey, there has been a significant rise in the number of financial services organizations offering cryptoasset products to their clients.
Half of the respondents indicated that their organizations were actively offering at least one type of cryptoasset product or service in 2023, an increase from 41 percent in 2021.
Institutional investors broaden their crypto portfolios
The survey also highlighted a growing trend among institutional investors incorporating cryptoassets into their investment strategies.
Nearly four in ten (39 percent) of the institutional investors surveyed reported having direct or indirect exposure to cryptoassets in 2023, up from 31 percent in 2021.
This marks a considerable recovery and increased confidence in cryptoassets following a turbulent market in 2022 characterized by major crypto firm collapses and increased fraud incidents.
Resilience and recovery in the crypto market
Kunal Bhasin, a partner at KPMG in Canada’s Digital Assets practice, noted that despite the challenges in 2022, the crypto market has shown resilience.
“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. Our survey findings suggest cryptoassets are increasingly seen as an investible alternative asset class among such institutional investors and financial services organizations in Canada.”
Stable interest in regulated crypto products
The survey findings also indicated that exposure to crypto via exchange-traded funds (ETFs) remained steady among investors.
Despite the approval of U.S. spot Bitcoin ETFs earlier this year, about 50% of investors have consistently had exposure to crypto through ETFs and other regulated products since 2021.