Accounting firm KPMG has reported that institutional investors are increasingly turning to cryptocurrencies as a way to protect their investments against the potential devaluation of fiat currencies by central banks.
Canadian Market Growth
In Canada, KPMG’s study found that:
- 50% of financial service providers now offer crypto asset services, up from 41% in 2021.
- 39% of institutional investors had crypto exposure in 2023, compared to 31% in 2021.
Reasons for Crypto Adoption
Kareem Sadek, leader of KPMG’s Digital Assets practice, attributes this growth to:
- Canada’s supportive regulatory environment for crypto assets.
- Rising crypto asset prices.
Crypto as a Debasement Hedge
Kunal Bhasin, co-leader of KPMG’s Digital Assets practice, suggests that institutions are also viewing crypto assets as a hedge against currency debasement:
- The rising US national debt and inflation may have contributed to the 2023 crypto rally.
- Investors are seeking alternative asset classes that can act as a store of value and protect against currency devaluation.
KPMG’s findings indicate that crypto assets are gaining acceptance among institutional investors and financial organizations in Canada as a viable investment option.
