DACH Digital Investments Survey 2021

Around 88% of DACH-focused funds are not currently investing in digital assets. Nevertheless, taking into account the conservative stance of the DACH-focused funds, the achieved 4% looks like a notable milestone.

Almost half (46%) of DACH-focused funds are interested in one way or another in digital assets and are ready to study the issue. The development of the DACH investment landscape will largely depend on the results of the early adopters’ investments.

Talking about early adopters, 7% of respondents are currently at a late planning stage and are considering investing in the digital assets market in the course of 2021.

New regulations and introduction of CBDCs and Digital Euro will accelerate the adoption. However, as the financial industry is highly regulated, the degree of freedom will depend on the compliance requirements.

In order to show the potential of the numbers, there are currently about 1.2 trillion euros (1.45 trillion US dollars) invested in Spezialfonds with fixed investment conditions. Taking into account that about 46% of respondents are more or less interested in investing in digital assets, the potential investment volume in the next three years could reach approximately 552 billion euros (657 billion US dollars).

Even if analyzed by conservative estimates, 7% of respondents are at a late planning stage, which means that by the end of 2021, investments in digital assets of up to 84 billion euros (100 billion US dollars) can be expected.

Regulatory uncertainty has become a key barrier to investment in digital assets for the majority (86%) of DACH-focused funds. However, it is at the current moment that the market is witnessing significant progress in this area.

Regarding the lack of service providers and the availability of infrastructure, which became a barrier for 57% of respondents, we have also seen significant progress on the part of regulators recently. The survey showed that liquidity, volatility, price levels and lack of traditional products are not worth the trouble yet for respondents.

Thus, the lack of understanding of digital assets, which has become a barrier for almost 60% of DACH-focused funds, will become one of the key obstacles to market development in the near future. And as the experience of popularizing cryptocurrencies has shown, this drawback is largely solved in the process of gaining experience by the early adopters.

While up to 14% of respondents are considering interacting with the DeFi solutions, one of the most impressive scenarios for the development of DACH-focused funds’ investments in digital assets is the potential for investors to interact with the DeFi solutions.

Now the big question is: what stablecoins will act as a basis for the regulated DeFi ecosystem? Chances are high that digital in addition to digital dollars, digital yuan, digital euro and other CBDCs will do the job.