A new study on Bitcoin security reveals that institutional investors are still hesitant to purchase BTC because of concerns about the security of crypto custodial services.
Nickel Digital Asset Management, a cryptocurrency fund based in the United Kingdom, conducted a poll of 100 wealth managers and global institutional investors to determine the most pressing worries that investors have about cryptocurrency.
Respondents from the United States, France, Germany, the United Arab Emirates, and the United Kingdom took part in the poll, and they combined have $275 billion in assets under management, according to the results.
The poll, which was conducted online from May to June 2021, showed that institutional investors have low confidence in crypto security, with 76 percent of respondents expressing concerns about the security of custodial services as the reason they have not invested in crypto.
One of the most major obstacles cited by respondents was the regulatory framework itself. Other significant issues were a perceived lack of transparency and volatility, as well as a perceived lack of credible fund managers who were offering crypto investments at the time of publication.
Anatoly Crachilov, co-founder and CEO of Nickel Digital, stated that institutional concerns about cryptocurrency custody and security exist despite the fact that the sector has made “very strong progress on that front.”
Crypto service providers, according to Crachilov, have been increasingly employing advanced cryptographic solutions such as distributed keys and multi-party computation vaults, while traditional financial institutions have also been expanding into such services.
“We are now seeing Fidelity, BNY Mellon, and State Street entering the market, thus further reinforcing market infrastructure. All of this increases the confidence levels in the sector and lead to ever-growing allocations to this fast developing asset class,”
– Crachilov
The release of the new poll comes shortly after the Australian Securities Exchange issued a warning regarding custodial services on centralised cryptocurrency exchanges, alerting investors about cybersecurity risks, including the possibility of theft from hackers.