Original title: Singapore investors more likely than those in other regions to increase their crypto allocation in 2025: Sygnum survey
Original source: Sygnum survey
Original translation by: Wenser, Odaily Planet Daily
Editor’s note: As a 'crypto hub' in recent years, perhaps due to the painful experiences of Singapore's investment institutions during the recent FTX incident, the Singapore government has maintained a 'friendly yet cautious' attitude towards crypto regulation.
Nevertheless, the penetration rate of cryptocurrencies in Singapore is gradually rising, with more institutional and individual investors turning their attention to cryptocurrencies outside of 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, where economic globalization and the mainstreaming of cryptocurrencies are accelerating, Singapore may become the 'crypto hotspot' by 2025.
The following is a financial survey recently released by the well-known asset management group Sygnum, compiled and organized by Odaily Planet Daily, with some content edited.
Survey on the current state of Singapore investors: 57% of institutional investors plan to increase long-term holdings
Recently, the global digital asset banking group Sygnum announced the results of its annual future finance survey. This survey measures and analyzes the core interests, market sentiment, and trading behaviors of institutional and professional investors active in the cryptocurrency market. The respondents included over 400 individuals with an average of over 10 years of investment experience, including Sygnum's institutional clients, investors, and a diverse range of investment professionals from banks, hedge funds, multi-family and single-family offices, DLT foundations, funds, and asset managers, with 121 local respondents from Singapore participating in the survey.
Gerald Goh, co-founder and CEO of Sygnum Asia Pacific, stated: 'The year 2024 is filled with positive new developments and countless significant moments for cryptocurrencies and the broader digital asset ecosystem. Perhaps the most important of these is the launch of a Bitcoin spot ETF following approval from the U.S. Securities and Exchange Commission, which greatly accelerates institutional investors' adoption of digital assets.'
The survey indicates that investors in Singapore have a high enthusiasm for crypto assets: 57% of investors plan to increase long-term allocations to crypto assets, higher than the survey average of 47%. Notably, 30% of investors view the unclear regulatory environment as a major entry barrier, while 45% of respondents mentioned security and custody issues as major 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 shifts in sentiment among institutional investors, reflecting the current market conditions while providing references for the future development of the blockchain industry.
The top 3 reasons for investing in digital assets
Regarding investment strategies, surveys show that most institutional and professional investors in Singapore are increasing their investment in cryptocurrencies, with 57% of respondents planning to increase their crypto asset allocation. This is primarily driven by long-term confidence in the overall trend of cryptocurrencies and their diversification potential, even amidst a highly volatile crypto market.
· The primary reason for investing in cryptocurrencies is the desire to engage with the overall trend of cryptocurrencies (56%), followed by portfolio diversification (41%) and return on investment (39%);
Even amidst the current significant market volatility, 57% of respondents still plan to increase their cryptocurrency allocation; 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 reduce their respective holdings;
37% of respondents cited the availability of institutional products as a reason for increasing allocations.
In addition, another survey report shows that 63% of respondents have a high-risk appetite for crypto assets, indicating that most respondents interested in crypto assets are generally more comfortable with their volatility. At the same time, 28% of respondents showed a more cautious interest, intending to invest from a neutral perspective. Among the 17% of respondents who currently do not invest in cryptocurrencies, most tend to have low to medium risk tolerance, often mentioning issues such as a lack of trust in the on-chain world and asset volatility. Over a quarter are willing to allocate crypto assets in the future, while half have yet to decide on such investments, and 20% have no relevant investment plans at all.
Strong demand for asset class information
Singaporean investors seek better information quality and a deeper understanding of digital assets.
Compared to the global average of 76%, 90% of Singaporean investors stated: 'Access to quality information and better understanding of this asset class will encourage them to increase or start investing in cryptocurrencies.'
Institutional entry barriers
Notably, the report also indicates that while regulatory clarity has improved, security and custody issues are now the biggest barriers to institutional adoption of cryptocurrencies in Singapore, with 45% citing this as the main obstacle; the lack of effective information and insufficient understanding account for 41%, and asset volatility also ranks third, at 41%. The significant improvement in regulatory clarity brought about 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 stated 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 financial investment.
Cryptocurrency investment preferences
L1 public chains and Web3 infrastructure are currently the most attractive areas for cryptocurrency investment, primarily driven by trends such as DePIN (Decentralized Physical Infrastructure Network) and AI.
The top 3 areas of interest for Singaporean investors are L1 (71%), Web3 infrastructure (56%), and L2 (41%);
Respondents ranked asset classes with tokenization potential as follows: 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 sector investment exposure in target growth areas (36%).
Moreover, 91% of respondents stated that they primarily invest in blockchain protocol tokens (such as Bitcoin and Ethereum). This reflects an overwhelming preference for mature assets, which are considered to be less volatile and 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 mechanism and as a 'main ticket' to enter the cryptocurrency market. Interest in stablecoins has been steadily growing since last year, likely due to the increasingly mature regulatory framework for existing stablecoins, as well as the underperformance of many DApp-related tokens compared to mainstream tokens like Bitcoin and Solana.
It is noteworthy that the composition of investment portfolios and strategies is becoming diversified: nearly 40% of respondents invest in decentralized application (DApp) tokens, 39% invest in NFTs, and only 13% of respondents exclusively invest in L1 protocol tokens.
Finally, the study shows that if market conditions improve, investors planning to maintain their current allocations may increase their allocations more quickly, with 46% planning to increase allocations within the next six months, and over 60% of investors are optimistic about investing in the crypto market by 2025.
