Original source: Sygnum survey

Compiled by: Odaily Planet Daily (@OdailyChina)

Translator: Wenser (@wenser2010)

Editor's note: As a "crypto hub" in recent years, Singapore's official stance on crypto regulation has been "friendly yet cautious," possibly due to the painful experiences of local investment institutions during the FTX collapse.

Nevertheless, the penetration of cryptocurrency in Singapore is gradually increasing, with more institutional and individual investors turning their attention to cryptocurrencies outside of traditional finance. Following Trump's victory in the U.S. presidential election, potential measures such as Bitcoin strategic reserves have laid a solid foundation for the development of the cryptocurrency market. In the current and near future, as economic globalization and the mainstreaming of cryptocurrencies accelerate, Singapore may become a "hotbed for crypto capital" in 2025.

Below is a financial survey recently released by the well-known asset management group Sygnum, compiled and organized by Odaily Planet Daily, with some content edited.

Survey on the Current Status of Singaporean Investors: 57% of Institutional Investors Plan to Increase Long-term Holdings

Recently, the global digital asset banking group Sygnum released the results of its annual Future Finance survey. This survey measures and analyzes the core interests, market sentiment, and trading behaviors of institutional and professional investors active in the cryptocurrency market. The survey included over 400 respondents, all with an average of over 10 years of investment experience, including Sygnum's institutional clients, investors, and a diverse group of investment professionals from banks, hedge funds, multi-family and single-family offices, DLT foundations, funds, and asset managers, with a total of 121 local respondents from Singapore participating in the survey.

Gerald Goh, Co-founder and CEO of Sygnum Asia Pacific, stated: "The year 2024 is filled with positive new developments and countless important moments for cryptocurrencies and the broader digital asset ecosystem. Perhaps the most significant is the launch of Bitcoin spot ETFs approved by the U.S. Securities and Exchange Commission, which greatly accelerates the adoption of digital assets by institutional investors."

The survey shows that Singaporean investors have a high enthusiasm for crypto assets: 57% of investors plan to increase their long-term allocation to crypto assets, higher than the survey average of 47%. Notably, 30% of investors view the unclear regulatory landscape as a major barrier to entry, while 45% of respondents mentioned security and custody issues as primary considerations, indicating that the development of the crypto ecosystem has benefited from regulatory progress. In light of this, the report aims to highlight new trends and shifts in sentiment among institutional investors, reflecting the current market conditions and providing references for the future development of the blockchain industry.

Three Main Reasons for Investing in Digital Assets

Regarding investment strategies, the survey shows that most institutional and professional investors in Singapore are increasing their investments in cryptocurrencies, with 57% of respondents planning to increase their allocation to crypto assets. This is primarily driven by long-term confidence in the broader crypto trend and its diversification potential, even amid high volatility in the crypto market.

• The primary reason for investing in cryptocurrencies is the desire to tap into the broader crypto trend (56%), followed by portfolio diversification (41%) and return on investment (39%);

• Even amid significant market volatility, 57% of respondents still plan to increase their cryptocurrency allocation; 65% indicated they have a higher risk tolerance for such assets;

• 27% of respondents plan to maintain their current holdings, with only 2.5% planning to reduce their holdings;

• 37% of respondents cited the availability of institutional products as a reason for increasing their allocation.

Additionally, another survey report indicates that 63% of respondents have a high risk appetite for crypto assets, suggesting that most respondents interested in crypto assets are generally more comfortable with their volatility. Meanwhile, 28% of respondents expressed a more cautious interest, aiming to invest from a neutral position. Among the 17% of respondents who currently do not invest in cryptocurrencies, most tend to have a low to medium risk tolerance, frequently citing issues such as a lack of trust in the on-chain world and asset volatility. Over a quarter are willing to allocate to crypto assets in the future, while half remain undecided about investing, and 20% have no investment plans at all.

Strong Demand for Information on Asset Classes

Singaporean investors seek better quality information and a deeper understanding of digital assets.

Compared to the global average of 76%, 90% of Singaporean investors stated: "Access to quality information and a better understanding of this asset class would encourage them to increase or start investing in cryptocurrencies."

Institutional Barriers to Entry

Notably, the report also shows that while regulatory clarity has improved, security and custody issues are now the biggest barriers to cryptocurrency adoption among institutions in Singapore, with 45% citing this as a primary obstacle; 41% mentioned a lack of effective information and insufficient understanding, while asset volatility ranked third, also at 41%. The significant improvement in regulatory clarity brought about by the U.S. Bitcoin spot ETF and Ethereum spot ETF has injected considerable confidence for more institutions to join the investment ranks, but market education remains crucial.

• 75% of respondents believe that regulatory clarity has improved;

• 73% of respondents believe that cryptocurrency ETFs have increased their confidence in this asset class;

• 90% of respondents stated that more comprehensive and complete information would prompt them to increase their investment.

Cryptocurrency Investment Preferences

L1 public chains and Web3 infrastructure are currently the most attractive areas for cryptocurrency investment, primarily driven by trends such as DePIN (Decentralized Physical Infrastructure Networks) and AI.

• The top three areas of interest for Singaporean investors are L1 (71%), Web3 infrastructure (56%), and L2 (41%);

• Respondents ranked the areas with tokenization potential as follows: mutual funds (47%), corporate bonds (47%), equities (40%), and hedge funds (39%);

• In terms of investment preferences, the preferred strategies include actively managed investments that generate excess returns (41%), followed by passive income investments (37%) and industry investment exposure in target growth areas (36%).

Additionally, 91% of respondents stated they primarily invest in blockchain protocol tokens (such as Bitcoin and Ethereum). This reflects an overwhelming preference for mature assets, which are perceived to have lower volatility and are supported by traditional institutions. This interest also extends to other L1 public chain competitors, such as decentralized smart contract platforms and ecosystem infrastructures like Solana and BNB Chain.

Half of the respondents hold stablecoins, using their non-volatility as a risk hedging tool and as a "main ticket" to enter the cryptocurrency market. Interest in stablecoins has been growing since last year, likely due to the increasingly mature regulatory framework for existing stablecoins and the underperformance of many DApp-related tokens compared to mainstream tokens like Bitcoin and Solana.

Notably, the composition of investment portfolios and strategies is diversifying: nearly 40% of respondents invest in decentralized application (DApp) tokens, 39% invest in NFTs, and only 13% invest solely in L1 protocol tokens.

Finally, the study indicates that if market conditions improve, investors planning to maintain their current allocations may increase their allocations more quickly, with 46% of investors planning to increase their allocations in the next six months, and over 60% of investors holding an optimistic view on cryptocurrency investments in 2025.

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