Changing Attitudes Towards Digital Assets
The sentiment surrounding digital assets among major investors is shifting once again, according to Ron Biscardi, CEO of iConnections, a leading platform for capital introductions. Biscardi, who has over 25 years of experience in alternative investments and oversees a platform managing more than $55 trillion in assets, is well-positioned to observe these trends. His organization facilitates thousands of meetings each year between fund managers and institutional investors, offering a glimpse into how rapidly perspectives can evolve.
He recalls that interest began stabilizing during last year’s conference, following several challenging years marked by the crypto market’s downturn after the FTX collapse in 2022. “By 2025,” he mentioned, “optimism about a more crypto-friendly regulatory attitude in Washington contributed to this shift, albeit slowly.”
Shift in Tone
This year, more than 75 digital asset funds were present at the event, with around 750 meetings held between fund managers and allocators. This is comparable to 2022, when enthusiasm for cryptocurrencies peaked prior to the FTX crisis. Nearly 25% of limited partners using the iConnections platform now express interest in digital asset strategies, indicating that cryptocurrencies are becoming more mainstream within alternative investments rather than being viewed as niche options.
Interestingly, family offices make up the largest group of LPs showing interest, aligning with the trend of backing innovative asset classes. While some family offices remain hesitant about these investments, traditional wealth managers are increasingly feeling pressure to include digital assets for their affluent clients, especially in regions like Dubai, Switzerland, and Singapore.
Interest persists, even with Bitcoin’s fluctuating price. Despite a nearly 25% decline since the start of the year and a market cap drop exceeding $1 trillion since its peak, the appetite for cryptocurrencies endures. Popular crypto stocks like Coinbase and MicroStrategy have also fallen behind other tech stocks this year.
Nonetheless, Biscardi believes that digital asset managers are on the verge of gaining institutional acceptance. He asserts that Bitcoin has already crossed this threshold, while altcoins are catching up. “The last major step involves establishing a regulatory framework to ensure safety,” he said.
This regulatory challenge is critical for chief investment officers. “Regulatory hurdles are the biggest concern,” Biscardi pointed out, emphasizing the need for accountability. Large allocators are merely trustees of others’ funds, which makes them cautious about deploying money into perceived risky assets unless they can assure their boards of responsible and secure allocation.
The dialogue surrounding cryptocurrencies has also transformed. In 2022, skepticism lingered around whether they were legitimate investments or mere Ponzi schemes. “I don’t hear those questions anymore,” Biscardi noted.
Notably, some traditionally conservative funds are starting to invest in Bitcoin and Ethereum ETFs, aiming to enhance returns without drastically altering their portfolios. This is especially relevant now, as many investors predict slower equity returns compared to the past decade.
Still Considered a Risk Asset
Despite this progress, Bitcoin is still treated as a risk asset rather than a safe haven. “Bitcoin’s behavior reflects that,” he explained, pointing out its correlation with stocks during market volatility, contrary to gold.
Moreover, direct purchasing of tokens among institutions remains uncommon; they generally prefer asking about the specifics of an ETF or fund structure. Limited partners depend on general partners to make coin selections. “LPs entering this arena are keenly interested in GP choices,” he added.
It’s become standard for cryptocurrency firms to invest in promoting their offerings. This year saw a noticeable uptick in sponsorship at the event, with major players like BitGo, Galaxy Digital, Ripple, and Blockstream taking prominent sponsorship roles.
Ultimately, while Bitcoin faces challenges, the landscape for digital assets appears to be evolving, fostering cautious optimism as interest grows.
