The career risk for executives becoming involved in the crypto sector is falling since the election of President Trump but regulation and liquidity are seen as important to mitigating any career risk for investing in the sector, according to new global research by London-based Nickel Digital Asset Management (Nickel).
The study with organisations invested in the sector found more than half (53 per cent) believe the career risk for executives in the crypto sector has fallen under a Trump Presidency with 17 per cent saying it has significantly reduced. Around a third (33 per cent) say the risk has increased but just 1 per cent say it has significantly increased.
Nickel’s research with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates with organisations who collectively manage around USD1.1 trillion in assets shows there is a strong focus on regulation to mitigate career risk.
More than four out of five (83 per cent) say it is extremely or very important in reducing career risk when investing in digital assets with 30 per cent saying it is extremely important.
However, the most significant factor in mitigating career risk from investing in digital assets identified by the study is improved market liquidity. Around 38 per cent selected that ahead of 32 per cent selecting greater institutional involvement and 17 per cent choosing improvements to market infrastructure. Around 13 per cent selected regulatory clarity.
Around half (48 per cent) questioned say they expect more trading platforms in the sector over the next 12 months, which they expect will boost institutional involvement while 24 per cent expect more regulatory clarity and 19 per cent more custodial solutions. Around 10 per cent say development in blockchain scalability will help increased institutional adoption over the next 12 months.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, says: “There clearly has in the past been a perception around career risk for executives getting involved in the crypto sector.”
“The gradual mainstream adoption of crypto including firms such as BlackRock and Fidelity has been turbo-charged by the Trump presidency and the fear of career risk is receding although many investors in the space still believe there is a stigma.
“Robust regulation is central to the growth of the sector but there are more practical issues to be addressed including better liquidity and improvements to market infrastructure that will mitigate current counterparty risks.”
