Institutional Interest in Crypto Assets Surges in Canada: KPMG Report

Canada: An Emerging Hub for Institutional Crypto Investments

In a recent survey conducted by KPMG, institutional investors in Canada showcased a significant increase in their exposure to cryptocurrency assets compared to previous bull market cycles.

The survey, titled “Institutional Adoption of Cryptoassets,” gathered insights from 65 respondents, including 31 institutional investors managing assets over $500 million and 34 financial services organizations.

2023 Saw a Surge in Institutional Interest Towards Crypto Assets

According to KPMG’s latest report, released on April 24, 39% of institutional investors reported having direct or indirect exposure to crypto assets in 2023, up from 31% in the previous study conducted in 2021.

Financial firms also showcased a positive trend, with 50% offering crypto asset services in 2023, a significant increase from 41% in 2021. Additionally, a third of institutional investors allocated 10% or more of their portfolios to crypto assets, indicating a growing confidence in this asset class.

Kunal Bhasin, a partner at KPMG Canada’s Digital Assets practice, highlighted firms’ exploration of alternative investments to hedge against economic uncertainties, such as inflation and rising debt levels in the U.S.

Why Canada Stands Out in the Crypto Space

Canada has emerged as a favorable destination for crypto companies, with many relocating operations due to regulatory challenges in the U.S. Companies like Coinbase have expanded their presence in Canada, attracted by the country’s approach to regulation.

The approval of spot Bitcoin and Ethereum ETFs in Canada in February 2021 played a pivotal role in attracting local investors to the crypto asset class. With the recent approval of spot Bitcoin ETFs in the U.S., Canada has witnessed a surge in institutional investor interest in the crypto space.

The survey revealed that Canadian ETFs, trusts, and regulated products are popular investment vehicles among institutional investors. The stock market, including listings like Galaxy Digital on the Toronto Stock Exchange, has also seen increased participation from institutional players.

Furthermore, the derivatives market has witnessed a significant uptick in institutional interest, indicating a growing maturity and sophistication in the crypto investment landscape.