Institutional investors and wealth managers are predicting a boom in the stablecoin sector, a new study by CrossLedger Capital has shown.
A survey of pension funds, wealth managers, insurance asset managers, family offices and hedge funds across 13 countries found 85% expect the market capitalisation of stablecoin to exceed $3 trillion within five years, compared with $200 billion at the end of last year.
They are also expecting the sharp uptick in the value of transactions processed through stablecoins to continue.
At the end of last year, over $27 trillion transactions were processed through stablecoins, a three times increase on the previous year. More than three quarters (78%) of investors believe it will hit $100 trillion within two years, with almost half (49%) expecting the $50 trillion milestone to be hit this year.
The study found investors expect rapid growth in the use of stablecoins across a range of functions, with transactions and access to DeFI seen as benefitting the most.
However, investors believe there are risks involved in investing in stablecoins and rank their dependence on reserves, whether it’s precious metals or fiat currencies, as the biggest risk.
Regulatory uncertainty was ranked as the second biggest risk.
Graham Cooke, CEO and founder of Brava, which launched CrossLedger Capital, said: “Institutional investors and wealth managers worldwide are well aware of the stablecoin growth story and expect it to accelerate in the near term with market capitalisation and value of transactions expanding rapidly.
“Institutions are focussed on the wider usage of stablecoins as engagement with the sector increases as underlined by how they see the market developing and their awareness of the risks of investing.”
Main image: luke-chesser-CxBx_J3yp9g-unsplash
