Binance Research published a report that analyzed the behavior and strategies of institutional cryptocurrency investors.

Analysts at Binance Research interviewed 76 institutional investors with assets ranging from $100,000 to over $25 million and found out how they came to the cryptocurrency market, what strategies they prefer to use and where they store cryptocurrencies. Most respondents are foundations, companies, and institutions. Most respondents entered the cryptocurrency market after many years of experience in the traditional financial industry. More than 25% worked in the financial sector for more than 7 years. On the cryptocurrency market, their experience is more modest, ranging from 1 to 3 years, so they came to the crypto industry during its rise from the end of 2016.

The most popular investment strategies of institutional-grade investors are high-frequency trading (35.5%), technical analysis (25.0%) and market making (19.7%). The most widely used stablecoin is USDT. Due to its high liquidity and capitalization, 40% of respondents prefer this stablecoin despite its controversial reputation. Among USDT alternatives, USDC from Coinbase and Circle and BUSD from Binance were named.

The most shocking was the answer to the question about how to store cryptocurrencies. Although institutional investors operate large crypto assets, 92.1% use exchange wallets for storage. Barely a third of respondents (32.9%) use cold wallets, and only 2.6% of survey participants are clients of custodian services.

The main either risk or growth factor is regulation, the survey shows. Institutional investors are sure that the future of the cryptocurrency industry depends on how world authorities will regulate this market. Various derivative financial instruments based on digital assets, including Bitcoin ETFs, and their use by traditional brokerage companies will also positively affect the development of the cryptocurrency market. They do not see any risk for the cryptocurrency market in Libra or digital currency from the Central Bank of China. It is curious that most of the clients of investment funds and managers do not care about privacy and confidentiality features of cryptocurrencies.