Sygnum Report: Singapore Could Become the Next 'Crypto Hot Money Haven'

Original Title: Singapore investors more likely than those in other regions to increase their crypto allocation in 2025: Sygnum survey

Original Source: Sygnum survey

Original Translation: Wenser, Odaily Planet Daily

Editor's Note: As a recent "crypto hub," perhaps due to the painful experience of Singaporean institutions in the previous FTX scandal, Singapore has maintained a "friendly yet cautious" stance on crypto regulation.

Nevertheless, the penetration of cryptocurrency in Singapore continues to rise steadily. More and more institutions and individual investors are shifting their focus to cryptocurrencies outside the traditional financial sector. Additionally, a series of potential measures such as Bitcoin strategic reserves post-Trump's U.S. presidential election have laid a solid foundation for the development of the cryptocurrency market. In the current and near future, where economic globalization and the mainstreaming of cryptocurrencies are accelerating, Singapore may become the "crypto hot money gathering place" in 2025.

Below is a recent financial survey published by the renowned asset management group Sygnum, compiled and translated by Odaily Planet Daily, with some content edited for brevity.

Singapore Investors Landscape Survey: 57% of Institutional Investors Plan to Increase Long-Term Holdings

Recently, the global digital asset banking group Sygnum released the results of its annual Future of Finance survey. The survey measured and analyzed core interests, market sentiments, and trading behaviors of institutional and professional investors active in the cryptocurrency market. The survey respondents included over 400 participants with an average of over 10 years of investment experience, including Sygnum's institutional clients, investors, and a diverse set of investment professionals from banks, hedge funds, multi-family and single-family offices, DLT foundations, funds, and asset managers. A total of 121 local Singapore respondents participated in the survey.

Gerald Goh, Co-Founder and CEO of Sygnum Asia, stated: "For the cryptocurrency and broader digital asset ecosystem, 2024 was full of positive new developments and numerous pivotal moments. One of the most significant may have been the launch of a Bitcoin spot ETF following approval by the U.S. Securities and Exchange Commission—significantly accelerating institutional adoption of digital assets."

The survey shows that investors in Singapore have a high level of enthusiasm for cryptocurrency assets: 57% of investors plan to increase their long-term cryptocurrency holdings, higher than the survey average of 47%. It is worth noting that 30% of investors consider the unclear regulatory situation as a major barrier to entry, while 45% of respondents mentioned security and custody issues as the main considerations, indicating that the development of the crypto ecosystem has benefited from regulatory progress. In light of this, the report aims to highlight new trends and changes in sentiment among institutional investors, which can both reflect the current market situation and provide insights for the future development of the blockchain industry.

3 Major Reasons for Investing in Digital Assets

Regarding investment strategies, the survey shows that the majority of institutional and professional investors in Singapore are increasing their investment in cryptocurrency, with 57% of respondents planning to increase their cryptocurrency holdings. This is mainly driven by confidence in the cryptocurrency mega-trend and its diversification potential, even in the face of high market volatility.

· The primary reason for investing in cryptocurrency is to participate in the cryptocurrency mega-trend (56%), followed by portfolio diversification (41%) and return on investment (39%);

· Even in the current high market volatility, 57% of respondents still plan to increase their cryptocurrency holdings; 65% say they have a higher risk tolerance for such assets;

· 27% of respondents plan to maintain their current holdings, with only 2.5% planning to reduce their holdings accordingly;

· 37% of respondents cite the availability of institutional products as a reason for increasing their allocation.

In addition, another survey report shows that 63% of respondents have a high risk preference for cryptocurrency assets, indicating that the majority of those interested in cryptocurrency assets are usually confident in their volatility. At the same time, 28% of respondents show a more cautious interest, aiming to invest from a neutral position. Among the 17% of respondents who are not currently invested in cryptocurrency, the majority tend to have a moderate to low risk tolerance and often mention issues such as lack of trust in the online world and asset volatility. Over a quarter are willing to allocate to cryptocurrency assets in the future, while half are still undecided about investing, and 20% have no investment plans in this regard.

Strong Demand for Asset Class Information

Singaporean investors are seeking better information quality and a deeper understanding of digital assets.

Compared to a global average of 76%, 90% of Singaporean investors state, "Access to high-quality information and a better understanding of this asset class would encourage them to increase their investment or start investing in cryptocurrency."

Institutional Access Barriers

Of note, the report also shows that while regulatory clarity has improved, security and custody issues are now the biggest barriers for Singaporean institutions to adopt cryptocurrency, with 45% citing this as a primary barrier; a lack of adequate information and understanding ranks at 41%, and asset volatility comes in third, also at 41%. The significant improvement in regulatory clarity brought about by the U.S. Bitcoin spot ETF and Ethereum spot ETF has injected considerable confidence for more institutional participation in investment, but market education remains crucial.

· 75% of respondents indicated they believe regulatory clarity has improved;

· 73% of respondents think cryptocurrency ETFs have increased their confidence in this asset class;

· 90% of respondents stated that more comprehensive information would prompt them to increase their funding allocation.

Cryptocurrency Investment Preferences

L1 public chains and Web3 infrastructure are currently the most attractive areas for cryptocurrency investment, primarily driven by trends such as DePIN (Decentralized Physical Infrastructure Network) and AI.

· The top 3 areas of interest for Singaporean investors are L1 (71%), Web3 infrastructure (56%), and L2 (41%);

· Respondents believe the top-ranked areas with tokenization potential are mutual funds (47%), corporate bonds (47%), equities (40%), and hedge funds (39%);

· In terms of investment preference, the preferred investment strategies include generating excess returns through active management (41%), followed by passive income-generating investments (37%), and exposure to growth-targeted industries (36%).

Additionally, 91% of respondents stated they primarily invest in blockchain protocol tokens (e.g., Bitcoin and Ethereum). This reflects a strong preference for mature assets considered to have lower volatility and backing from traditional institutions. This interest also extends to other L1 public chain competitors, such as decentralized smart contract platforms and ecosystem infrastructures like Solana and BNB Chain.

Half of the respondents hold stablecoins, using their price stability as a risk mitigation tool and as a "primary ticket" to enter the cryptocurrency market. Interest in stablecoins has been growing continuously since last year, possibly due to the increasingly mature regulatory framework for stablecoins and the underperformance of many DApp-related tokens compared to major tokens like Bitcoin and Solana.

It is worth noting that portfolio composition and investment strategies are becoming more diversified: nearly 40% of respondents invest in Decentralized Application (DApp) tokens, 39% invest in NFTs, and only 13% of respondents invest solely in L1 protocol tokens.

Lastly, the research indicates that if market conditions improve, investors planning to maintain their current allocation may increase their allocation more quickly, with 46% of investors planning to increase their allocation in the next six months, and over 60% of investors holding a positive outlook on the crypto market investment by 2025.

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