According to a report published by the South China Morning Post, Hong Kong's institutions have soured on cryptocurrencies following a recent sell-off.
The report, which cites a survey conducted by cryptocurrency exchange Bitstamp, said that nearly every tenth of institutional investors had plans to either trim their cryptocurrency exposure or completely ditch crypto. This represents a substantial increase compared to the previous quarter.
Less than a third of the surveyed institutional investors said that they would invest more funds into crypto.
Q9 Capital's James Quinn told the outlet that institutional investors are now visibly less active in the sector since they are no longer able to make "easy money."On the bright side, the vast majority of Hong Kong-based institutions (68%) say that they would advise their clients to buy crypto. The lion's share of survey participants also have trust in digital assets. This shows that institutional investors are not ready to completely abandon cryptocurrencies just yet in spite of their dismal performance and macro headwinds.
As reported by U.Today, Tallbacken Capital Advisors CEO Michael Purves recently questioned whether crypto would be able to maintain strong institutional adoption. Purves believes that some sophisticated players may not rush to buy the dip even if the Bitcoin price drops substantially lower, given that the largest cryptocurrency has failed to perform as an uncorrelated portfolio diversifier.
The lack of regulatory clarity remains the main issue for Hong Kong's institutional investors, according to the survey.