Source: Sygnum survey
Translated by: Odaily Planet Daily (@OdailyChina)
Translator: Wenser (@wenser2010)
Editor’s note: As a recent 'crypto hub', perhaps due to the painful experiences of related investment institutions in Singapore during the previous FTX incident, the Singapore government has maintained a 'friendly yet cautious' attitude towards crypto regulation.
Nevertheless, the penetration rate of cryptocurrency in Singapore is gradually increasing, with more institutional and individual investors turning their attention to cryptocurrencies beyond traditional finance. Following Trump’s victory in the U.S. presidential election, a series of potential measures such as Bitcoin strategic reserves have laid a solid foundation for the development of the cryptocurrency market. In the current and near future, as economic globalization and the mainstreaming of cryptocurrencies accelerate, Singapore may become the 'hotbed of crypto capital' by 2025.
The following is a financial survey recently released by the well-known asset management group Sygnum, translated and organized by Odaily Planet Daily, with some content edited.
Survey on the status of investors in Singapore: 57% of institutional investors plan to increase long-term holdings
Recently, the global digital asset banking group Sygnum released the results of its annual Future Finance survey. The survey measures and analyzes the core interests, market sentiments, and trading behaviors of institutional and professional investors active in the cryptocurrency market, with over 400 respondents on average having more than 10 years of investment experience, including Sygnum's institutional clients, investors, and a diverse group of investment professionals from banks, hedge funds, multi-family and single-family offices, DLT foundations, funds, and asset managers, with a total of 121 local Singaporean respondents participating in the survey.
Gerald Goh, co-founder and CEO of Sygnum Asia Pacific, stated: '2024 is full of positive new developments and numerous important moments for cryptocurrencies and the broader digital asset ecosystem. Perhaps the most significant may be the launch of the Bitcoin spot ETF after approval by the U.S. Securities and Exchange Commission—this greatly accelerates the adoption of digital assets by institutional investors.'
The survey shows that investors in Singapore have a high enthusiasm for crypto assets: 57% of investors plan to increase their long-term allocation to crypto assets, higher than the survey average of 47%. Notably, 30% of investors view unclear regulatory conditions as a major entry barrier, whereas 45% of respondents mentioned security and custody issues as primary considerations, indicating that the development of the crypto ecosystem has benefited from regulatory progress. In light of this, the report aims to highlight new trends and sentiment changes among institutional investors, reflecting current market conditions and providing insights for the future development of the blockchain industry.
The top three reasons for investing in digital assets
Regarding investment strategies, the survey shows that most institutional and professional investors in Singapore are increasing their investments in cryptocurrencies, with 57% of respondents planning to increase their allocation to crypto assets. This is mainly driven by long-term confidence in the broader cryptocurrency trend and its diversification potential, even as the crypto market remains highly turbulent.
The primary reasons for investing in cryptocurrency are to tap into the broader cryptocurrency trend (56%), followed by portfolio diversification (41%) and return on investment (39%);
Even amid significant market volatility, 57% of respondents still plan to increase their cryptocurrency allocations; 65% stated they have a greater risk tolerance for such assets;
27% of respondents plan to maintain their current holdings, with only 2.5% planning to decrease their respective holdings;
37% of respondents cite the availability of institutional products as a reason for increasing allocations.
Additionally, another survey report indicates that 63% of respondents have a high risk preference for crypto assets, suggesting that most respondents interested in crypto assets are generally more comfortable with their volatility. Meanwhile, 28% of respondents expressed a more cautious interest, aiming to invest from a neutral standpoint. Among the 17% of respondents not currently investing in cryptocurrencies, most lean towards a low to moderate risk tolerance, frequently citing issues such as a lack of trust in the on-chain world and asset volatility. More than a quarter are willing to allocate to crypto assets in the future, while half remain undecided about investing, and 20% have no relevant investment plans.
Strong demand for information on asset classes
Singaporean investors hope to obtain better information quality and a deeper understanding of digital assets.
Compared to a global average of 76%, 90% of Singaporean investors stated: 'Access to quality information and a better understanding of this asset class will encourage them to increase or start investing in cryptocurrencies.'
Institutional entry barriers
It is noteworthy that the report also shows that while regulatory clarity has improved, security and custody issues are now the biggest barriers for Singaporean institutions adopting cryptocurrencies, with 45% of respondents citing this as the main obstacle; 41% pointed to a lack of effective information and insufficient understanding, while asset volatility ranked third, also at 41%. The significant improvement in regulatory clarity brought by the U.S. Bitcoin spot ETF and Ethereum spot ETF has injected considerable confidence for more institutions to join the investment ranks, but market education remains crucial.
75% of respondents indicated that they believe regulatory clarity has improved;
73% of respondents believe that cryptocurrency ETFs have increased their confidence in this asset class;
90% of respondents stated that more comprehensive and complete information would prompt them to increase their investment.
Cryptocurrency investment preferences
L1 public chains and Web3 infrastructure are currently the most attractive investment areas in cryptocurrency, mainly driven by trends such as DePIN (Decentralized Physical Infrastructure Networks) and AI.
The top three areas of interest for Singaporean investors are L1 (71%), Web3 infrastructure (56%), and L2 (41%);
Respondents ranked the most promising areas for tokenized assets as mutual funds (47%), corporate bonds (47%), equities (40%), and hedge funds (39%);
In terms of investment preferences, the preferred investment strategies include generating excess returns through active management (41%), followed by passive income investments (37%) and industry investment exposure in targeted growth areas (36%).
Additionally, 91% of respondents indicated that they primarily invest in blockchain protocol tokens (such as Bitcoin and Ethereum). This reflects an overwhelming preference for mature assets, which are perceived to have lower volatility and are supported by traditional institutions. This interest also extends to other L1 public chain competitors, such as decentralized smart contract platforms and ecosystem infrastructures like Solana and BNB Chain.
Half of the respondents hold stablecoins, using their non-volatility as a risk hedging tool and as a 'main ticket' to enter the cryptocurrency market. Since last year, interest in stablecoins has been growing, possibly due to the increasingly mature regulatory framework for existing stablecoins, as well as many DApp-related tokens underperforming compared to mainstream tokens like Bitcoin and Solana.
It is noteworthy that portfolio composition and investment strategies are diversified: nearly 40% of respondents invest in decentralized application (DApp) tokens, 39% invest in NFTs, and only 13% invest solely in L1 protocol tokens.
Finally, the study indicates that if market conditions improve, investors planning to maintain their current allocations may increase their allocations more rapidly, with 46% of investors planning to increase allocations in the next six months, and over 60% of investors holding an optimistic view on cryptocurrency investment in 2025.
