A global study by Nickel Digital finds 66% of institutional investors rank crypto among their top five assets for risk-adjusted returns, ahead of private equity and emerging markets. 75% expect crypto to be part of institutional portfolios within five years. 73% foresee more digital asset fund launches in 2025, with growing involvement from traditional financial institutions.
A growing number of institutional investors, wealth managers and hedge funds are turning their focus towards cryptocurrencies, expecting the asset class to outperform other investments over the next five years. According to a new global study commissioned by London-based Nickel Digital Asset Management, the trend signals a significant shift in how professional investors perceive the role of digital assets in their portfolios.
The study, conducted in January 2025 by market research firm Pureprofile, surveyed 200 institutional investors and wealth managers from the United States, United Kingdom, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates. Collectively, these organisations manage around $1.1 trillion in assets. The findings show a broad and increasing acceptance of crypto within the traditional investment community.
Commenting on the findings, Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, states:
“Traditional finance firms are already making significant strides into the digital assets space and that is only predicted to increase over the next two years. The views of institutional investors and wealth managers on the ability of crypto to deliver attractive risk-adjusted returns helps to explain why that is the case, and why professional investors increasingly expect crypto to be part of institutional investors portfolio allocation.”
Traditional Finance Eyes Digital Asset Funds
A key finding from the research shows that 43% of respondents expect a dramatic increase in the number of large traditional financial institutions launching crypto-focused funds and investment products over the next two years. A further 53% anticipate a moderate increase. In total, nearly three-quarters (73%) foresee a general rise in digital asset fund launches this year, while only 2% predict a decline.
Institutional interest is also seen as a positive development for the broader digital asset ecosystem. Around 18% of respondents say the participation of major traditional firms is “very positive” for their own involvement, while 74% view it as “quite positive”.
Crypto Tipped for Outperformance on Risk-Adjusted Basis
The survey results highlight that 66% of institutional investors and wealth managers rank cryptocurrency among the top five asset classes most likely to generate attractive risk-adjusted returns over the next five years. This places crypto ahead of private equity (64%) and emerging market equities (61%), with commodities and real estate following at 50% and 47% respectively.
The full ranking of top five asset classes by expected risk-adjusted returns is as follows:
| Asset Class | % of Respondents Selecting as Top 5 |
|---|---|
| Cryptocurrency | 66% |
| Private equity | 64% |
| Emerging market equities | 61% |
| Commodities | 50% |
| Real estate | 47% |
| European investment grade debt | 47% |
| US equities | 42% |
| US investment grade debt | 42% |
| European equities | 36% |
| Gold | 4% |
Three out of four respondents (75%) believe cryptocurrencies will become part of standard institutional portfolio allocation within the next five years.
Preferred Vehicles for Exposure to Digital Assets
When asked about preferred investment structures, respondents favour actively managed, diversified long-only portfolios as the most effective way to access digital asset markets. These are followed by actively managed, diversified long-short portfolios. Passive diversified portfolios take the third spot, with arbitrage-focused hedge funds ranking fourth. Exchange-Traded Funds (ETFs) and Exchange-Traded Products (ETPs) complete the list.
About Nickel Digital Asset Management
Nickel Digital Asset Management is a London-based investment firm authorised by the Financial Conduct Authority (FCA) and registered with the Commodity Futures Trading Commission (CFTC). It provides institutional-grade digital asset strategy solutions tailored to a broad range of risk profiles.
Founded by professionals with experience from Bankers Trust, Goldman Sachs, JPMorgan and other global institutions, Nickel pursues systematic investment strategies, including its flagship non-directional multi-strategy fund focused on alpha generation. Risk management is at the core of Nickel’s investment philosophy.
This was notably demonstrated in market downturns such as March 2020 and May 2021, when the firm preserved capital and achieved positive returns.
Nickel has been recognised with several industry accolades, including:
- Hedgeweek Best Relative Performance of the Year – Multistrategy Fund (2024)
- HFM EuroHedge Emerging Manager Awards (2020)
- HFM Quant Performance Award (2021)
- Best 12-Month Risk-Adjusted Performance by Hedgeweek Digital Asset Awards (2022)
- Best Digital Asset Manager Europe – PAN Finance (2022)
- Two Hedgeweek awards in 2023 for best sustained risk-adjusted returns over 12 and 36 months
Nickel Digital Asset Management Ltd is authorised and regulated by the FCA, registered with the CFTC, and a member of the National Futures Association (NFA).
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