Senior executives optimistic about digital assets market, Acuiti report says
16 March 2023 UK
Image: monsitj/stock.adobe.com
Only 14 per cent of senior executives active in crypto derivatives trading believe that the collapse of FTX will reduce industrial participation in crypto markets, a recent report from management intelligence platform Acuiti says.
This figure demonstrates the industry’s resilience, the ‘Crypto Derivatives Management Insight Report’ says. It is a statement supported by the fact that 75 per cent of those polled are ‘quite’ or ‘very’ optimistic about the digital asset market in the next quarter.
On a broad level, approximately 75 per cent of those surveyed predict an increase in regulation as a result of the collapse. The same quantity expects to see a permanent separation of exchange and custody functions in efforts to reduce concentration risk, with a third of participants anticipating a consolidation of native crypto markets and a shift of liquidity to onshore regulated or over-the-counter markets.
In order to reassure investors of their management processes, a number of crypto derivatives exchanges have released proof-of-reserves. However, 64 per cent of those polled stated that they were ‘concerned’ by the quality of this information.
The report finds that the leading industry concern is counterparty risk, with almost half (47 per cent) of participants ‘very concerned’ about the issue. 31 per cent said the same for operational risk, 13 per cent for liquidity risk and 6 per cent for market risk.
As a result, approximately 50 per cent of crypto derivatives market participants plan to invest in risk management over the next year. This will primarily be outsourced to third-party providers, the report says, rather than built in-house.
The report is based on findings from the Acuiti Crypto Derivatives Expert Network quarterly survey, produced in collaboration with Digital Asset Research (DAR) and risk platform technology provider Cloudwall. The network consists of more than 70 senior executives from asset managers, hedge funds, sell-side firms and proprietary trading groups.
Will Mitting, founder of Acuti, comments: “This quarter’s report demonstrates the resilience of the crypto derivatives market as it recovers from an immensely challenging year. With every challenge the market has faced in its short existence, it has come back stronger and strengthened the foundations.”
Doug Schwenk, CEO of DAR, adds: "The survey results are enlightening and encouraging for the growth of the crypto derivatives market.”
This figure demonstrates the industry’s resilience, the ‘Crypto Derivatives Management Insight Report’ says. It is a statement supported by the fact that 75 per cent of those polled are ‘quite’ or ‘very’ optimistic about the digital asset market in the next quarter.
On a broad level, approximately 75 per cent of those surveyed predict an increase in regulation as a result of the collapse. The same quantity expects to see a permanent separation of exchange and custody functions in efforts to reduce concentration risk, with a third of participants anticipating a consolidation of native crypto markets and a shift of liquidity to onshore regulated or over-the-counter markets.
In order to reassure investors of their management processes, a number of crypto derivatives exchanges have released proof-of-reserves. However, 64 per cent of those polled stated that they were ‘concerned’ by the quality of this information.
The report finds that the leading industry concern is counterparty risk, with almost half (47 per cent) of participants ‘very concerned’ about the issue. 31 per cent said the same for operational risk, 13 per cent for liquidity risk and 6 per cent for market risk.
As a result, approximately 50 per cent of crypto derivatives market participants plan to invest in risk management over the next year. This will primarily be outsourced to third-party providers, the report says, rather than built in-house.
The report is based on findings from the Acuiti Crypto Derivatives Expert Network quarterly survey, produced in collaboration with Digital Asset Research (DAR) and risk platform technology provider Cloudwall. The network consists of more than 70 senior executives from asset managers, hedge funds, sell-side firms and proprietary trading groups.
Will Mitting, founder of Acuti, comments: “This quarter’s report demonstrates the resilience of the crypto derivatives market as it recovers from an immensely challenging year. With every challenge the market has faced in its short existence, it has come back stronger and strengthened the foundations.”
Doug Schwenk, CEO of DAR, adds: "The survey results are enlightening and encouraging for the growth of the crypto derivatives market.”
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