According to the research by London-based Nickel Digital Asset Management, a European digital assets hedge fund manager founded by Bankers Trust, Goldman Sachs and JPMorgan alumni, institutional investors and wealth managers expect the level of M&A activity in the crypto sector to keep growing.
Nickel commissioned research with 200 professional investors from across seven countries who collectively manage around $2.2 trillion in assets and found nearly four out of five (79%) predict the rising level of M&A in the market to continue to increase over the next 12 to 24 months.
Increased M&A activity will not stop the launch of new funds investing in crypto and digital assets, the research shows, with more professional investors surveyed expecting a rise in the number of new funds compared with those expecting a fall in fund launches.
Around 43% predict a rise in the number of crypto and digital asset focused funds in the next 12 months compared with 36% predicting a cull of funds.
Capital protection will be critical to future of funds
There is a strong consensus about the future for funds which have demonstrated ability to mitigate negative impact of the crypto sell-off on the underlying portfolios, with as much as 80% saying they are more likely to allocate to funds which have protected capital whilst demonstrating risk management acumen during the market turmoil.
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Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said: “The failure of a few large centralised players in crypto space led to a wave of bankruptcies amongst the firms overexposed to them, setting the scene for a major M&A activity in the sector and, ultimately, leading to complete reshaping of competitive landscape.”
Nickel Digital Asset Management is a London-based FCA-authorised and CFTC-registered investment manager that offers a range of digital asset strategy solutions for investors. Its mission is to provide a gateway for traditional investors into the digital assets market across a broad range of risk profiles.
The firm pursues a range of systematic strategies dedicated to the digital assets market, with flagship offering of market-neutral arbitrage and multi-strategy non-directional funds, focusing on alpha generation.