FameEX Hot Topics | U.S. Private Investors Anticipate Surge in Crypto Investments for 2024

A recent survey by law firm Barnes & Thornburg found that 84% of participants anticipate an increase in private investment in cryptocurrency over the next 12 months. More than half (59%) indicated they are more likely to invest in crypto funds compared to a year ago.

The survey included 138 limited partners, general partners, and service providers from private equity, venture capital, hedge fund, and investment banking firms across various U.S. industries. This marks a significant shift from last year when most respondents felt the cryptocurrency market negatively impacted their organizations.

The improved sentiment towards digital assets is attributed to the institutional adoption of crypto investment products such as exchange-traded funds (ETFs) and derivatives. Additionally, regulatory clarity from the debut of crypto-tied ETFs in January and the subsequent market recovery have enhanced investor confidence.

However, 26% of investors expressed reluctance to invest in crypto funds over the next year. Their primary concerns were crypto market volatility (46%), fraud (43%), and platform collapses (43%).

“A year and a half after the FTX collapse, we've seen significant recoveries in Bitcoin and other cryptocurrencies. The SEC’s approval of Bitcoin ETFs is a major development for the industry and may also increase the willingness of allocators to invest in private crypto funds and other nonregulated products,” said Scott Baels, partner and co-chair of Barnes & Thornburg’s private funds and asset management practice.

Investors are also pushing for more liquidity and better earnings. The survey reveals that the most significant concern for limited partners is "returns," with 54% of respondents listing it as a primary issue. Another major concern for limited partners is "financing terms," which saw an increase from 23% to 50% of respondents this year, indicating tougher conditions for raising capital. Among general partners, "fundraising" was identified as the most pressing issue, with 40% citing it, up from 23% last year.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.