Big Four accounting firm KPMG said investors are interested in cryptocurrencies as a way to hedge against central bank declines in the value of fiat currencies.
In a new report, KPMG surveyed the Canadian market and found that by 2023, half of the financial services providers surveyed in Canada offered cryptocurrency asset services. This is an increase from 41% in 2021.
The study also found that 39% of Canadian institutional investors will have exposure to cryptocurrencies in 2023. This is an increase from 31% in 2021.
Canadian institutional investors have become more familiar with cryptocurrencies for two main reasons, says Kareem Sadek, emerging technology risk leader and co-leader of KPMG’s digital assets practice.
“Canada has played a leading role in creating a regulatory environment that supports innovation in cryptocurrency assets, from approving the first Bitcoin and Ethereum exchange-traded funds to allowing sophisticated strategies involving derivatives and Ethereum staking. I have done it. “These actions, along with rising cryptocurrency prices, will likely make the cryptocurrency sector increasingly attractive to institutional investors.”
Canadian institutions are also looking at cryptocurrency assets as a hedge against a decline in the value of the country’s currency, said Kunal Bhasin, partner and co-leader of KPMG’s digital assets practice in Canada.
“Rising U.S. debt and rising inflation are likely to be the catalyst for a cryptocurrency rally in 2023, with investors appearing to be seeking alternative asset classes that serve as both decline hedges and reliable stores of value. Our findings show that cryptocurrency assets are increasingly viewed as an investable alternative asset class among institutional investors and financial services organizations in Canada.”
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