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Of the 328 CFOs and CIOs representing around half of the global insurance industry, 6% responded their firm was either already invested or considering an investment into cryptocurrencies.

United States-based insurers are the most interested in cryptocurrency investment according to a Goldman Sachs global survey of 328 chief financial and chief investment officers regarding their firm’s asset allocations and portfolios.

The investment banking giant recently released its annual global insurance investment survey, which included responses regarding cryptocurrencies for the first time, finding that 11% of U.S. insurance firms indicated either an interest in investing or a current investment in crypto.

Speaking on the company’s Exchanges at Goldman Sachs podcast on Tuesday, Goldman Sachs global head of insurance asset management Mike Siegel said he was surprised to get any result:

“We surveyed for the first time on crypto, which I thought would get no respondents, but I was surprised. A good 6% of the industry respondents indicated that they’re either invested in crypto or considering investing in crypto.”

Asia-based insurers were next in line, with 6% interested or currently invested, and European insurers came in at only 1%.

The report found cryptocurrencies were in fifth place for the asset class insurers expect to deliver the highest returns over the next 12 months, with 6% ranking it as their first choice, beating United States and European equities.

Around 2% of firms indicated a current crypto investment, and while it’s a small number of firms indicating investment or interest, Goldman Sachs analysts wrote that this level of interest “is still notable.”

On the podcast, Siegel discussed a follow-up survey conducted of crypto-interested firms to understand their motivation behind purchasing:

“We did some follow-up questions on that, and generally, the companies that are either invested or considering crypto are doing so to understand the market and to understand the infrastructure. But if this becomes a transactable currency, they want to have the ability down the road to denominate policies in crypto and also accept premium in crypto, just like they do in, say, dollars or yen or sterling or euro.”

Only 1% of the total surveyed firms said they would increase their crypto position over the next 12 months; 7% said they would maintain their current position; and 92% said they would not invest in crypto over the next year.

Related: Wealth report: As old money procrastinates, young money goes crypto

Despite the growing interest, there are still those pessimistic about crypto as 16% said it was an asset class they expected to deliver the lowest returns over the next 12 months. Overall, crypto was the third-lowest ranked asset class on this measure.

Mathew McDermott, the bank’s global head of digital assets, wrote in the report:

“As the crypto market continues to mature, coupled with growing regulatory certainty, a cross-section of institutions are becoming more confident to explore investment opportunities as well as recognizing the disruptive impact of the underlying blockchain technology. I have been positively surprised by the rising adoption by global Asset Managers, who clearly recognize the potential of this market.”

One thought on “11% of US insurers invest — or are interested in investing — in crypto

  1. If you look back a year ago the word “ponzi” was almost never used in this sub. Now it appears in about 1/4 of the front page posts. It is just like DCA, which got way popular ~ a year ago during a decent dip.

    Now the thing is most of the uses of the word “ponzi” are not actually using it correctly. The dictionary .com definition of ponzi scheme is “a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit”.

    Many users on this sub use “ponzi” in a different meaning. Older investors are able to cash out emissions when new users buy into the ecosystem and if new users dry up then the value of the ecosystem dries up.

    The issue with this definition is that it makes every single token that has emissions a “ponzi scheme”. Earning emissions for providing liquidity is an integral part for many tokens to get a large liquidity pool. If existing users and new users stop buying the token the price will go down from the sell pressure of the people selling the emissions that they earned.

    Now I get that a lot of cryptos are not sustainable and will eventually fail. People will be left holding bags and often that is the person who gets into a project once it is hyped vs the person that gets in early. I have learned in crypto that it is better to take incremental profits and potentially miss out on having a giant bag if it goes to the moon than be the person holding the bags.

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