Canadian investors are embracing cryptocurrencies at an impressive rate, with nearly 40% of institutions now having some exposure to digital assets. This is according to a recent survey by KPMG in Canada and CAASA, highlighting a significant shift from the market slump of 2022.

Learning from Turbulence

The 2022 market downturn, marked by high-profile company failures and increased fraud, had a "cleansing effect" on the industry, says Kunal Bhasin of KPMG's Digital Assets practice. These events seem to have instilled greater confidence in crypto as a legitimate asset class.

Direct Ownership on the Rise

The survey reveals a dramatic increase in direct cryptocurrency ownership among institutions. A whopping 75% now hold crypto directly, compared to just 29% in 2021. Notably, exposure through exchange-traded funds (ETFs) remains steady at 50%, likely due to the recent approval of spot Bitcoin ETFs in the US.

New Avenues for Crypto Investment

The survey also points to a growing trend of Canadian institutions accessing crypto through public equities and derivatives. This suggests a more sophisticated approach to crypto investment, moving beyond simple ETF holdings.

A Pivotal Moment

The approval of spot Bitcoin ETFs in the US is seen as a "pivotal moment" for crypto assets by Kareem Sadek of KPMG's Digital Assets practice. This regulatory green light likely bolstered investor confidence in Canada as well.

Crypto Adoption Booming in Canada

Industry experts like Mark Greenberg, Managing Director for Canada at Kraken, point to a general flourishing of crypto adoption across Canada. He sees increased interest from individuals, institutions, and diverse demographics.

Bullish Outlook for Canada and Beyond

Greenberg believes crypto adoption is poised to climb further in Canada, especially considering the large population underserved by traditional financial systems. Analysts like Mathew McDermott of Goldman Sachs also predict a global surge in institutional interest in crypto this year. This broader participation could lead to increased market liquidity, attracting even more institutional players.

Canada's crypto market is maturing and gaining traction, with institutions leading the charge. As regulations evolve and the market stabilizes, we can expect even wider adoption of digital assets in the years to come.