According to a recent report from KPMG, one of the Big Four accounting firms, investors are showing increasing interest in cryptocurrency as a way to protect themselves against the devaluation of fiat currencies by central banks.
The report focuses on the Canadian market and reveals that in 2023, 50% of financial service providers surveyed in the country offered crypto asset services. This is a significant increase from the 41% recorded in 2021. Additionally, the study found that 39% of Canadian institutional investors had exposure to crypto in 2023, up from 31% in 2021.
Kareem Sadek, the Emerging Technology Risk leader and co-leader of KPMG’s Digital Assets practice, explains that Canadian institutional investors have grown more comfortable with crypto for two main reasons. Firstly, Canada has established a regulatory framework that supports innovation in crypto assets, such as approving the first Bitcoin and Ethereum exchange-traded funds and allowing sophisticated strategies involving derivatives and Ethereum staking. Secondly, the rising prices of crypto assets have likely attracted institutional investors to the space.
Kunal Bhasin, partner and co-leader of KPMG in Canada’s Digital Assets practice, adds that institutions in Canada are also turning to crypto assets as a way to safeguard against the devaluation of national currencies. The combination of increasing US debt and inflation has acted as a catalyst for the crypto rally in 2023. As a result, investors are seeking alternative asset classes that can serve as a hedge against devaluation and provide a reliable store of value. The survey findings suggest that crypto assets are increasingly viewed as a viable alternative investment among institutional investors and financial services organizations in Canada.
It’s important to note that the opinions expressed in this article are not investment advice. Investors should conduct their own research before making high-risk investments in Bitcoin, cryptocurrency, or digital assets. Transfers and trades in these assets carry their own risks, and any losses incurred are the responsibility of the individual. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets and is not an investment advisor.
