FameEX Hot Topics | U.S. Private Investors Forecast Crypto Investment Surge in 2024

A recent survey conducted by law firm Barnes & Thornburg revealed that 84% of participants believe private investment in cryptocurrency will increase over the next 12 months, with more than half (59%) stating they are more likely to invest in crypto funds than a year ago.

The survey interviewed 138 limited partners, general partners, and service providers from private equity, venture capital, hedge fund, and investment banking firms across various U.S. industries. The report highlights a significant shift from last year when most respondents felt the cryptocurrency market negatively impacted their organizations.

The improved sentiment toward digital assets is driven by the institutional adoption of crypto investment products such as exchange-traded funds (ETFs) and derivatives. Additionally, regulatory clarity from the debut of crypto-tied ETFs in January and the subsequent market recovery have bolstered investor confidence.

However, 26% of investors indicated they are less likely to invest in crypto funds over the next year. The primary concerns cited were crypto market volatility (46%), fraud (43%), and platform collapses (43%).

“A year and a half after the FTX collapse, we’ve seen significant recoveries in Bitcoin and other cryptocurrencies. The SEC’s approval of Bitcoin ETFs is a major development for the industry and may also increase the willingness of allocators to invest in private crypto funds and other nonregulated products,” said Scott Baels, partner and co-chair of Barnes & Thornburg’s private funds and asset management practice.

Investors are also pushing for more liquidity and better earnings. The survey reveals that the most significant concern for limited partners is "returns," with 54% of respondents listing it as a primary issue. Another major concern for limited partners is "financing terms," which saw an increase from 23% to 50% of respondents this year, indicating tougher conditions for raising capital. Among general partners, "fundraising" was identified as the most pressing issue, with 40% citing it, up from 23% last year.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.