THE CONNECTED LANDSCAPE

A study produced by FT Longitude for

THE PRIVATE WEALTH IN DIGITAL ASSETS STUDY 2022

Overview Landscape Sentiments People Outlook

DIGITAL ASSETS ARE AT A TURNING POINT

Understanding the evolving landscape of digital assets

Digital assets are now ubiquitous: not only do they continue to be essential for businesses and governments, but they are an integral part of our professional and personal lives.

Download Report

THE CONNECTED LANDSCAPE

THE PRIVATE WEALTH IN DIGITAL ASSETS STUDY 2022

Landscape

DIGITAL ASSETS ARE AT A TURNING POINT

Understanding the evolving landscape of digital assets

Digital assets are now ubiquitous: not only do they continue to be essential for businesses and governments, but they are an integral part of our professional and personal lives.

Time for digital assets to grow up

Unbound and transparent, digital assets are providing people around the world with more freedom in storing, transferring, and accruing value.

But digital assets still need more credibility, and better accessibility and long-termism in the investor mindset will get them that. In our research, our investors indicated that they want to see better infrastructure and more mature investment behaviours.

Factors influencing adoption

More accessible platforms and longer-term investors are most likely to increase the popularity of digital assets

Time for digital assets to grow up

Unbound and transparent, digital assets are providing people around the world with more freedom in storing, transferring, and accruing value.

But digital assets still need more credibility, and better accessibility and long-termism in the investor mindset will get them that. In our research, our investors indicated that they want to see better infrastructure and more mature investment behaviours.

Factors influencing adoption

More accessible platforms and longer-term investors are most likely to increase the popularity of digital assets

Traditional financial players explore the digital assets market

For sophisticated and experimental digital assets investors, who have moderate to high interest in investing, entry into the market of long-term investors and traditional finance players will positively reinforce crypto’s security and longevity.

Despite the current crypto winter, there is plenty of this going on. For example, venture capital giant Andreessen Horowitz raised $4.5 billion for its largest-ever cryptocurrency fund this year, and Citadel Securities and Virtu Financial Inc. recently announced plans to build a cryptocurrency trading platform in partnership with retail brokerages.

Traditional financial players explore the digital assets market

For sophisticated and experimental digital assets investors, who have moderate to high interest in investing, entry into the market of long-term investors and traditional finance players will positively reinforce crypto’s security and longevity.

Despite the current crypto winter, there is plenty of this going on. For example, venture capital giant Andreessen Horowitz raised $4.5 billion for its largest-ever cryptocurrency fund this year, and Citadel Securities and Virtu Financial Inc. recently announced plans to build a cryptocurrency trading platform in partnership with retail brokerages.

The rise of bespoke services

Seasoned investors prefer specialised services, while sceptical investors prefer to invest through traditional institutions.

Most of our sceptical investors would prefer to use a bank or traditional wealth manager when they invest in digital assets. But sophisticated investors prefer services such as crypto exchanges and crypto asset managers, which can offer more diverse and specialised investment services.

Preferred channels for investment

The rise of bespoke services

Seasoned investors prefer specialised services, while sceptical investors prefer to invest through traditional institutions.

Most of our sceptical investors would prefer to use a bank or traditional wealth manager when they invest in digital assets. But sophisticated investors prefer services such as crypto exchanges and crypto asset managers, which can offer more diverse and specialised investment services.

Preferred channels for investment

News around the world

Even before the crypto winter, the US, UK and EU were proposing new cryptocurrency regulations. The UK has announced ambitions to become a global crypto hub, proposing a Royal Mint NFT and other measures to woo digital asset companies. And in Europe, legislation is progressing that aims to boost the potential of digital assets and is described by the European Parliament as “immensely promising”.

Regulators are stepping in, but can they keep up?

“We’re seeing an explosion of regulation all around the world,” says one director of a European digital assets investment firm. “As it continues to develop, it will unlock a tranche of institutional capital that is currently interested in the space but is wary of getting on the wrong side of the regulator.”

Sophisticated or sceptical, the investors in our research welcome regulation of digital assets. It has the potential to establish clear rules and expectations for the sector, and encourage traditional finance players to jump in.

Regulation holds the potential to establish clear rules and expectations for the sector, and encourage traditional finance players to jump in.

It’s extremely difficult for [regulators] to understand crypto, for two reasons: one is it is a young industry and they don't have expertise and experience. And the second reason is that crypto is just developing too quickly.

Pavel Matveev

CEO, Wirex

News around the world

Even before the crypto winter, the US, UK and EU were proposing new cryptocurrency regulations. The UK has announced ambitions to become a global crypto hub, proposing a Royal Mint NFT and other measures to woo digital asset companies. And in Europe, legislation is progressing that aims to boost the potential of digital assets and is described by the European Parliament as “immensely promising”.

Regulators are stepping in, but can they keep up?

“We’re seeing an explosion of regulation all around the world,” says one director of a European digital assets investment firm. “As it continues to develop, it will unlock a tranche of institutional capital that is currently interested in the space but is wary of getting on the wrong side of the regulator.”

Sophisticated or sceptical, the investors in our research welcome regulation of digital assets. It has the potential to establish clear rules and expectations for the sector, and encourage traditional finance players to jump in.

Regulation holds the potential to establish clear rules and expectations for the sector, and encourage traditional finance players to jump in.

It’s extremely difficult for [regulators] to understand crypto, for two reasons: one is it is a young industry and they don't have expertise and experience. And the second reason is that crypto is just developing too quickly.

Pavel Matveev

CEO, Wirex

In the mid term and long term, more regulation will mean more trust, more protection and transparency in terms of clear rules for all market participants. Once we have rules, we will see more adoption coming from banks and other enterprises.

Pavel Matveev

CEO, Wirex

Keeping up with the pace of growth in digital assets

of sophisticated investors say that global regulatory change is increasing their appetite for investment

of sceptical investors say that internationally coordinated regulation would increase their confidence to invest in the future

But new rules could end up damaging the market

There’s a downside to regulation, however. According to our survey respondents, it can throw up barriers to adoption and growth: 66% say that regulatory changes have made it more difficult to access the digital assets market over the past 12 months.

“I do worry about the extent to which regulation could cripple the decentralised nature of this technology,” says one experimental investor in the research. “Because that's what makes it fantastic.”

In the mid term and long term, more regulation will mean more trust, more protection and transparency in terms of clear rules for all market participants. Once we have rules, we will see more adoption coming from banks and other enterprises.

Pavel Matveev

CEO, Wirex

Keeping up with the pace of growth in digital assets

of sophisticated investors say that global regulatory change is increasing their appetite for investment

of sceptical investors say that internationally coordinated regulation would increase their confidence to invest in the future

But new rules could end up damaging the market

There’s a downside to regulation, however. According to our survey respondents, it can throw up barriers to adoption and growth: 66% say that regulatory changes have made it more difficult to access the digital assets market over the past 12 months.

“I do worry about the extent to which regulation could cripple the decentralised nature of this technology,” says one experimental investor in the research. “Because that's what makes it fantastic.”