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Top Wall Street bank Goldman Sachs crypto survey indicates massive inroads into institutional adoption in the insurance sector. In its latest annual report on the sector, it said institutions are becoming more confident to explore investment opportunities in crypto.
The institutions are also recognizing the disruptive impact of the underlying blockchain technology, it noted.
In the recent past, enough has already been established in financial services to recognize cryptocurrencies as an asset class. The latest insurance survey report by Goldman Sachs is another step forward in this direction.
Crypto Is Top 5 Asset Class Among Insurers
Insurers around the world placed cryptocurrencies at fifth place in the list of asset classes that they would yield highest returns. The ranking was established in the Goldman Sachs crypto report when ranked the three asset classes expected to deliver the most in the next one year.
Accordingly, private equity, commodities, emerging market equities and real estate equity were picked as the first preference out of three. These four asset classes were followed by cryptocurrencies, expected to deliver the highest total returns.
Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, said,
“As the crypto market continues to mature, coupled with growing regulatory certainty, a cross section of institutions are becoming more confident to explore investment opportunities as well as recognizing the disruptive impact of the underlying block chain technology. I have been positively surprised by the rising adoption by global Asset Managers, who clearly recognize the potential of this market.”
Long Way Before Widespread Crypto Investments
The report also suggests that a vast majority of insurers are not considering investing in cryptocurrencies. Insurers based in the U.S. are slightly more interested, with 11% currently invested or considering investing in cryptocurrencies. Interest from Asian insurers, on the other side, stands at 6%, and Europeans insurers at 1%, the Goldman Sachs report said.
A mammoth 94% of the insurance companies said they were not considering investing in cryptocurrencies. While just about 2% have already invested in the asset class, a 4% of the insurers considering investing in crypto.
Meanwhile, Goldman Sachs was on Wednesday in talks with crypto exchange FTX to integrate leveraged derivatives trading. The bank’s collaboration with FTX was said to introduce several benefits including direct futures trading and introducing clients. The benefits also included the bank acting as a connection to the exchange, and providing capital top-ups for clients.
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