ig corporate investors ranging from hedge funds to pension and insurance companies have been piling into bitcoin in unprecedented numbers, according to recently-floated cryptocurrency exchange Coinbase.
Since the start of the year, Coinbase has seen a 170% increase in institutional investors piling into the currency.
Having had around $45 billion of institutional money invested through its platform in December, it now holds $122 billion, the group said.
Bitcoin surged in value during the first quarter of the year, although it has since plunged.
Coinbase’s head of hedge fund sales, Drew Robinson, said: “Over the last 12 months, we have seen a growing interest from institutional investors seeking to take advantage of the crypto space. However, this year, interest from pension funds and hedge funds has skyrocketed.”
He said the advent of crypto exchange traded products, which are derivatives that track the moves of cryptocurrencies, had increased demand.
Institutions had cited reasons ranging from hedging against inflation, diversification of corporate balance sheets and the desire for broader engagement in the digital economy. Clients of the big investment funds had also been asking them for more exposure as well, Robinson said.
Coinbase said it has more than 8000 institutional clients.
The company’s experience chimes with survey data showing institutional investors bought more than 132,000 bitcoins in the first quarter of 2021.