Money flood for bitcoin and co.? A new study predicts exactly that

According to a recent study, almost half of all German-speaking investment funds are interested in cryptocurrencies such as Bitcoin (BTC) and could invest several 100 billion euros in digital assets over the next few years.

The new Fund Location Act has been in effect in Germany since August 3. This allows special funds in Germany to invest up to 20 percent of their capital in Bitcoin and other crypto assets. The big question now is whether funds even want to do that.

If a new survey by tech think tank MINDSMITH is to be believed, the answer to that is a resounding “yes.”

The think tank recently published a study in which over 70 investment funds from the DACH region (Germany, Switzerland and Austria) were surveyed about Bitcoin and Co. MINDSMITH came to some interesting results. The company assumes that between 100 and 657 billion US dollars will flow from the DACH region into digital assets in the next three years.

DACH region is at an early stage of bitcoin adoption

The survey results show that around 88 percent of funds based in the German-speaking region are not currently invested in digital assets. However, according to the survey, 46 percent of German-speaking funds are already interested in Bitcoin and Co. In addition, the study shows that seven percent of the surveyed investment companies are currently in a late planning stage and still want to invest in crypto assets in 2021.

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In particular, MINDSMITH sees the introduction of clear regulations and central bank digital currencies (CBDCs) as a catalyst that will further accelerate this trend in the near future.

Several $100 billion could flow into Bitcoin and co. in the next few years

In addition, MINDSMITH also provides a forecast for the development of investments from the DACH region.

There are currently about 1.45 trillion US dollars invested in special funds. Taking into account that about 46 percent of the respondents are interested in investing in Bitcoin and Co, the investment volume from the DACH region could reach up to 657 billion US dollars in the next three years.

Furthermore, the tech think tank notes that over 100 billion US dollars could flow into crypto assets by the end of the year.

Regulatory uncertainty, lack of understanding and lack of infrastructure

Furthermore, the survey reveals that regulatory uncertainty (86 percent) in particular is currently still holding back many investments. However, not only the unclear guidelines, but also the lack of understanding and infrastructure are considered major obstacles to investment among funds. Almost 60 percent of those surveyed said that they still knew too little about Bitcoin and the like. Another 56.9 percent chalked up the lack of infrastructure and professional service providers in the crypto space.

Although the traditional financial world has often called digital assets like Bitcoin worthless, 69.4 percent now believe the opposite. Only 5.6 percent of the funds surveyed consider the current price level of Bitcoin and co. to be unattractive.

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Institutionals are interested in Decentralized Finance (DeFi).

In addition, MINDSMITH surveyed mutual funds on whether they would consider using DeFi. Fourteen percent of respondents said they would consider interacting with DeFi to maximize returns. MINDSMITH believes that the advance of CBDCs and stablecoins in particular could accelerate this development in the coming years.