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Nearly three out of four (74%) institutional investors and wealth managers questioned say their organisation will increase its level of investment in the sector in the year ahead. Nearly one in five (18%) will dramatically increase investment levels.

The study with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $3.5 trillion in assets, found growing confidence in the sector in the short and longer term.

Nearly nine out of 10 (87%) believe investment opportunities in the sector are attractive on a 12-month view with 39% saying investment opportunities are very attractive. Over five years 92% say investment opportunities are attractive with 39% describing them as very attractive.

Optimism about the future builds on limited expansion in the past year, the study found. Around two out of five (38%) said their organisation had increased investment in the sector in the past 12 months with 13% dramatically increasing investment levels.

However, nearly half (49%) said they had reduced investment levels in the sector in the past 12 months. Around 7% had sold all their holdings while 13% of those questioned had dramatically reduced investment in the digital assets sector.

Anatoly Crachilov, CEO and Founding Partner at Nickel Digital said: "The strong performance of the digital assets sector year to date is reflected in the strengthening optimism by forward-looking allocators that the market has entered a sustainable recovery trend and offers an opportunity to engage."