Increasing numbers of institutional investors and wealth managers are predicting growth in tokenisation as more become aware of the benefits, according to new global research (1) by London-based Nickel Digital Asset Management (Nickel), Europe’s leading digital assets hedge fund manager founded by alumni of Bankers Trust, Goldman Sachs and JPMorgan.
The study with organisations invested in the sector found 87% believe fund managers will increasingly look at the potential to tokenise investment funds and asset classes over the next three years. That compares to 75% who predicted more fund managers would explore tokenisation when the study (2) was last conducted just over six months ago.
Nickel believes growing support for the expansion of tokenisation is being driven by rising awareness of the benefits it potentially offers.
Its research with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $1.1 trillion in assets shows the role of tokenisation in facilitating liquidity and offering secondary marketing trading options are being recognised as the most attractive benefits.
They were rated the top two benefits by professional investors ahead of greater transparency and their role in enabling fractional ownership of assets while reduced settlement times and enhanced risk management were rated as the fifth and sixth most attractive benefits. Reduced cost was ranked seventh.
The study however shows there are still challenges to be addressed before tokenisation is more widely adopted – around 74% point to distribution issues while 73% are concerned about regulation.
Around 61% say widespread adoption of tokenisation will run up against investors’ reluctance to change while 59% identified the maturity of service providers as a challenge and 55% the current lack of tokenised assets. Less than half (49%) are concerned about the security risk of tokenisation and only 45% say lack of demand is a challenge.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said:
“Tokenisation is rapidly moving from concept to cornerstone with global heavyweights like BlackRock publicly endorsing tokenisation as the future of financial markets. It is great to see the increasing numbers of investors from our first survey to the current one agreeing with this paradigm shift — one where improved liquidity, enhanced transparency, and instant settlement will become the new standard.”
(1) Nickel Digital commissioned the market research company Pureprofile to interview 200 institutional investors and wealth managers across the US, UK, Germany, Singapore, Switzerland, Brazil and the UAE in January 2025
(2) Nickel Digital commissioned the market research company Pureprofile to interview 200 institutional investors and wealth managers across the US, UK, Germany, Singapore, Switzerland, Brazil and the UAE in June 2024.
