Institutional Investors In DeFi Investments Grows
Decentralised finance (DeFi) is emerging as a viable and alluring alternative, and this is causing a change in institutional investments. A London-based company called Nickel Digital Asset Management has shared key findings from its extensive global research that illuminate the shifting viewpoints of wealth managers and institutional investors.
A study by an investment manager found that 81% of respondents acknowledged the growing appeal of DeFi investment opportunities, with 23% expressing a heightened appeal for DeFi options. This highlights the changing landscape in which traditional financial players are recognizing the potential of DeFi protocols and platforms. However, the research also highlights challenges requiring resolution before full-scale institutional involvement can occur.
Liquidity concerns, KYC processes, and anti-money laundering regulations are primary roadblocks in decentralized finance (DeFi) investments. Nearly half of participants (47%) cited concerns about liquidity and its impact on operational efficiency. Moreover, 44% of respondents advocated for more defined regulatory frameworks before institutional investors could confidently embrace DeFi. Factors such as technology concerns (40%), secure custody solutions (37%), and uncertainties surrounding taxation (34%) also significantly influence investment decisions within the DeFi ecosystem.
(With inputs from Shikha Singh)
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