A recent Bank of America survey shows that most global fund managers still hesitate to invest in crypto despite the recent bullish momentum observed in the sector.
The survey, which includes 211 fund managers overseeing $540 billion in assets, found that around three-quarters of respondents had no crypto holdings at all.
On the other hand, the cryptographic allocation between managers holding these financial instruments is small. On average, these portfolios are dedicated to just 3.2% on digital assets.
It breaks down, with only 1% reporting an allocation of about 2% exposure, 2% retaining 4%. On average across groups, Crypto represents just 0.3% of its managed assets.
Commenting on these findings, Bloomberg ETF analyst Eric Bulknath suggested that low exposure could reflect past failures from these funds. He said some managers who previously made poor calls in a wide range of markets could be paying special attention to the fast-growing industry.
According to him:
“Aren’t these the “global managers” who said they were selling America in the first quarter?
Meanwhile, players from other industries pointed out that low participation rates could indicate an untapped potential for the crypto market.
Frankchapalo, Head of Content at GSR, said:
“Wall Street barely goes to zero, and Bitcoin is still $120,000. We’re ridiculously expensive.”
Historically, digital assets have provided strong returns, but have considerable volatility. This risk factor appears to be the reason why many institutional investors are restricting their crypto holdings.
Despite this careful approach, institutional interest in cryptocurrencies is growing. Over the past year, investors have gained increasing exposure through stocks in funds (ETFs) trading on crypto companies and exchanges focused on crypto.
Additionally, there was the emergence of Bitcoin-centric finance companies that added a significant amount of top-level ciphers to their balance sheets.
At the same time, the US regulatory environment also encourages wider adoption of emerging industries.
For context, President Donald Trump recently signed an executive order allowing digital assets to be included in his 401(k) retirement plan. Industry players believe this step could encourage fund managers to rethink their position and increase their crypto allocations.
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