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Asset Allocators Still Cautious on Cryptocurrencies
Money managers are often reluctant to dive into new asset classes. That notion appears to be holding true with cryptocurrencies as a recent survey suggests a small amount of asset allocators plan to embrace bitcoin and friends this year.
A survey of attendees at the Context Summits conference in Miami revealed that 11% planned to allocate to cryptocurrencies this year.
“The respondents included staff from funds-of-hedge-funds, consulting firms, endowments, foundations, sovereign wealth funds, pensions, and family offices representing a combined $5 trillion under management,” reports Institutional Investor.
The skepticism surrounding cryptocurrencies among institutional investors comes even as many of these market participants are expected to increase exposure to alternative investments amid expectations that equities could underperform relative to 2017’s performances.
“The demand for alternative investments is supported by doubts over how long the current bull market can last, with 69% of institutional allocators surveyed predicting that traditional equities and fixed income markets will underperform in 2018 when compared to 2017, and an additional 19% predicting similar year-over-year performance,” said Context Capital Partners.
Lingering Crypto Skepticism
Institutional investors’ reluctance to embrace cryptocurrencies arrives against a challenging backdrop for digital currencies. Just a few months ago, the digital currency universe had a combined market value of about $700 billion, but that number has since dwindled to around $262 billion as the price of bitcoin has plunged. Bitcoin, the largest crypto by market value, has lost more than half its value just this year.
“There remains uncertainty surrounding the long-term investment merits of cryptocurrencies as 71% of allocators have no plans to invest in crypto-related funds and 18% are still undecided,” said Context Capital.
While some institutional investors remain apprehensive about cryptocurrencies, the number of hedge funds focusing on blockchain and crypto investments is surging. That number was approximately 150 at the start of this year, up noticeably from the start of 2017, and some market observers believe the number of blockchain and digital currency hedge funds could double or triple again in 2018. Still, some market participants are expressing doubts.
“At the same time, there was broad confusion and skepticism about the viability of crypto as an asset class, with 27% calling it a fraud, 27% calling it legitimate and the remaining 47% saying they ‘don’t know,’” said Context Capital.
Some well-known investors and Wall Street executives have previously excoriated bitcoin while others have endorsed the digital currency.
Adoption
CryptoBase Report: January 25, 2025

1. SEC Opens Door for Banks to Hold Crypto Assets
In a significant policy shift, the U.S. Securities and Exchange Commission (SEC) has overturned previous guidance that treated digital tokens as liabilities on bank balance sheets. This change is expected to facilitate banks in offering cryptocurrency custody services without facing financial penalties, signaling a more welcoming approach to the digital asset sector under President Donald Trump’s administration.
2. Ledger Co-Founder Kidnapped in France
David Balland, co-founder of French cryptocurrency firm Ledger, was kidnapped by an armed gang demanding a €10 million ransom. During the 24-hour ordeal, Balland suffered severe injuries before being rescued by elite police forces. Ten suspects have been arrested, though the gang leaders remain at large. This incident highlights the increasing security risks faced by individuals in the cryptocurrency industry.
3. Trump’s Executive Order Boosts Crypto Market
President Donald Trump has issued an executive order titled “Strengthening American Leadership in Digital Financial Technology,” aiming to regulate and promote the cryptocurrency sector. The order establishes a Presidential Task Force on Digital Asset Markets to develop a federal framework for digital asset trading and explore creating a national reserve of digital assets. This move is seen as a significant shift toward a more crypto-friendly regulatory environment.
4. Andreessen Horowitz Refocuses Crypto Investments to U.S.
Venture capital firm Andreessen Horowitz is closing its London office and pulling back from UK crypto investments, refocusing on the U.S. market following President Trump’s election. The firm cited the new administration’s supportive stance on crypto as a reason for the shift. Founders Marc Andreessen and Ben Horowitz are advising Trump on technology policy, aligning with his administration’s approach to light-touch crypto regulation.
5. Market Reaction to Trump’s Crypto Policies
The cryptocurrency market experienced a dip following President Trump’s initial policy decisions, which included the creation of a task force to propose new crypto regulations and consider a U.S. cryptocurrency reserve. Bitcoin steadied at around $105,000, reflecting a tempered response to potential regulatory changes. Additionally, Trump-related cryptocurrencies like the $TRUMP token saw a significant drop in value, raising ethical concerns and prompting inquiries from Democratic lawmakers.
Closing Summary
The past 48 hours have seen significant developments in the cryptocurrency landscape, driven largely by policy shifts under President Trump’s administration. While regulatory changes signal a more crypto-friendly environment, the market’s response has been mixed, with notable fluctuations in asset values. Security concerns have also come to the forefront, underscoring the need for vigilance in this evolving sector.
Adoption
Cardano founder, Charles Hoskinson speaks on the future of Bitcoin and taking profits

Charles Hoskinson has always been a huge advocate for decentralized finance and building a network that could provide solutions to the problems with our current financial and banking systems. In this recent AMA Charles speaks out on his view about the issues that Bitcoin faces as well as reminding everyone that cryptocurrency isn’t all about taking profits.
Despite Charles Hoskinson open criticisms of Bitcoin he does say:
“I would still be working on Bitcoin if Bitcoin could evolve”
Adoption
PayPal’s crypto trading goes live in the US!

Customers will be able to trade up to $20,000 a week, rather than the originally announced $10,000.
On Thursday, PayPal’s crypto trading and payments went live for all eligible customers in the United States.
Per its updated announcement, PayPal ended its waitlist for customers looking to use cryptocurrency in the U.S. Trading features a limit of $20,000 per week, which is double the originally announced $10,000.
PayPal ultimately plans to make crypto payments available at 26 million merchants globally.
A representative said that PayPal will notify U.S. customers about the general availability of crypto services in the coming days.
Dan Schulman, CEO of PayPal, noted that the shift to supporting crypto was driven by what he sees as an “inevitable” drift toward virtual currencies.
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
Much-anticipated global services are expected to launch at the beginning of 2021, alongside crypto payments on Venmo. PayPal initially announced its plans to integrate crypto three weeks ago. The announcement led to a boost in BTC price.
As part of its crypto services, PayPal received the first conditional Bitlicense from the New York Department of Financial Services, one of the most hawkish sub-national financial regulators in the U.S. Many noted that the terms of PayPal’s crypto services would entail that coins bought on the platform would not be able to leave, likely as part of its compromise with regulators in bringing crypto services to such a wide user base.