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Are institutional investors marching into the crypto market?

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  • Huang, Xiaoran
  • Lin, Juan
  • Wang, Peng

Abstract

This study focuses on institutional investors who have added crypto securities to their portfolios. Using quarterly data over the period 2018Q1–2021Q4, we document that the number of such institutions has been increasing steadily and that both younger and larger institutions with active strategies are more likely to hold crypto securities. Furthermore, we find robust evidence that institutional investors include crypto securities in their portfolios largely for diversification.

Suggested Citation

  • Huang, Xiaoran & Lin, Juan & Wang, Peng, 2022. "Are institutional investors marching into the crypto market?," Economics Letters, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003305
    DOI: 10.1016/j.econlet.2022.110856
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    References listed on IDEAS

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    4. Ferreira, Miguel A. & Matos, Pedro, 2008. "The colors of investors' money: The role of institutional investors around the world," Journal of Financial Economics, Elsevier, vol. 88(3), pages 499-533, June.
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    6. Yukun Liu & Aleh Tsyvinski, 2021. "Risks and Returns of Cryptocurrency," Review of Financial Studies, Society for Financial Studies, vol. 34(6), pages 2689-2727.
    7. Borri, Nicola, 2019. "Conditional tail-risk in cryptocurrency markets," Journal of Empirical Finance, Elsevier, vol. 50(C), pages 1-19.
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    Cited by:

    1. Copestake, Alexander & Furceri, Davide & Gonzalez-Dominguez, Pablo, 2023. "Crypto market responses to digital asset policies," Economics Letters, Elsevier, vol. 222(C).
    2. Dombrowski, Niclas & Drobetz, Wolfgang & Momtaz, Paul P., 2023. "Performance measurement of crypto funds," Economics Letters, Elsevier, vol. 228(C).
    3. Artor Nuhiu & Florin Aliu & Jakub Horák & Bedri Peci, 2023. "Making Informed Decisions in the Volatile Crypto Market: An Analysis of Portfolio Risk and Return," SAGE Open, , vol. 13(3), pages 21582440231, August.

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    More about this item

    Keywords

    Institutional investors; Crypto market; Diversification;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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